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July 01, 2019

Government of Canada introduces new incentives for first-time homebuyers

Pepper Rodriguez

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The federal government is introducing a new set of measures to boost the new home market and help Canadians buy their first home.


The Canada Mortgage and Housing Corporation (CMHC) announced the details of the First-Time Home Buyer Incentive that could lower the monthly mortgage payments for qualified new homebuyers.

The shared-equity mortgage program will see the federal government contribute up to 10 percent towards the cost of a home in exchange for an equivalent equity stake in the property.

“Through the National Housing Strategy, more middle-class Canadians — and people working hard to join it — will find safe, accessible and affordable homes,” says Jean-Yves Duclos, Minister of Families, Children and Social Development and Minister Responsible for the CMHC.

Under the program, a family buying a $500,000 home could save as much as $286 per month or more than $3,430 a year.

“Our proposed measures will reduce the monthly mortgage for your first home by up to $286. This will mean more money in the pockets of Canadians and will help up to an estimated 100,000 families across Canada.”

The First-Time Home Buyer Incentive program, which starts on September 2, 2019, will help middle class families take their first steps towards homeownership by reducing monthly mortgage payments required for first-time homebuyers without increasing the amount they need to save for a
downpayment.

This program complements other measures taken in Budget 2019 to support first time homebuyers with their downpayment such as increased RRSP withdrawal limit from $25,000 to $35,000 The Government of Canada has allocated $1.25 billion over three years (starting in 2019) for this
program. The incentive will be available to first-time homebuyers with qualified annual household incomes up to $120,000.

Budget 2019 also previewed the Shared Equity Mortgage Provider Fund, a five-year, $100-million lending fund to assist providers of shared equity mortgages to help eligible Canadians achieve affordable homeownership. This will support an alternative homeownership model targeted at
first-time homebuyers, help attract new providers of shared equity mortgages and encourage additional housing supply. The fund will be launched on July 31st, 2019, and will be administered by CMHC.

For more information on the program and how to apply, go here: www.placetocallhome.ca/fthbi/first-time-homebuyer-incentive.cfm

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