Last week the BC Government announced the Home Owner Mortgage and Equity (HOME) Partnership. This program will provide down payment assistance to home buyers with less than 20% down.
Through the B.C. HOME Partnership program, the Province is helping first-time home buyers by contributing to the amount they have already saved for a down payment with a loan that is interest-free and payment-free for the first five years.
The brief details of the program are as follows:
- The B.C. HOME Partnership program will meet the buyer’s contribution up to 5% of the home’s purchase price, to a maximum purchase price of $750,000.
- After five years, buyers can either repay their loan or enter into monthly payments at current interest rates.
- Loans through the program must be paid off in 25 years – the same length as most mortgages.
- The program is set to start on January 16, 2017.
To be eligible for the program, eligible first time buyers must meet the following conditions:
- Have been a Canadian citizen or permanent resident for at least five years.
- Have resided in British Columbia for at least one year immediately preceeding the date of application.
- Be a first-time buyer who has not owned an interest in a residence anywhere in the world at any time.
- Use the property as their principal residence for the first five years.
- Purchase a home that has a purchase price of $750,000 or less (excluding taxes and fees).
- Obtain a high-ratio insured first mortgage on the property for at least 80% of the purchase price. Down payment of 5 – 19%.
- Have a combined, gross household income of all individuals on title not exceeding $150,000.
- Have saved a down payment amount at least equal to the loan amount for which the buyer applied.
The process for applying for the loan is as follows:
- Step 1: Get preapproval for an insured first mortgage from Your Mortgage Source. You can email firstname.lastname@example.org or call 604-556-3893.
- Step 2: Apply to BC Housing for the Home Owner Mortgage and Equity (HOME) partnership loan. If you are eligible, you will receive confirmation of eligibility and Homebuyer’s Kit which includes information for your Lender, Real Estate Agent, and Lawyer/Notary Public.
- Step 3: Find your home and provide the details of your planned purchase to BC Housing for approval.
Applications for the program will be accepted starting Jan. 16, 2017, for purchases that will close on or after Feb. 15, 2017.
Major concern with the program.
As of right now there are only a few lenders that accept borrowed down payments such as this program is offering. We have access to these lenders but there are only a few of them. The vast majority of lenders require the down payment to come from your own cash or a gift from family. We have not received any word yet from the majority of lenders as to whether or not they will accept these loans for the down payment. Therefore even though this program is available it may not be of benefit to you if lenders don’t accept it. As soon as we find out more information on this we will let you know.
If you have any questions regarding your own personal situation please contact our office.
For more information on our mortgage products please visit our website at www.ymscanada.ca.