On March 1st, the Canada Mortgage & Housing Corporation, also known as CMHC, discontinued the First Time Home Buyer Incentive effective March 21st. Don’t worry, this is not a major changet! I’ve been getting lots of questions so I thought I would clarify.
The First-Time Home Buyer Incentive program was a program available for anyone making under $120,000 (combined between both parties), purchasing a house for under $600,000 with less than 20% down. If you met all of that crazy criteria, then the Government would lend you an additional 5% down (up to 10% for new construction). .
The catch on top of all of that was that they then owned 5-10% of your house with you. In order to remove them off down the road, you would need to be able to buy them out and provide them 5-10% of the appraised value at the time of the buyout. Example if your house was purchased for $550,000 and they gave you 5% additional down payment ($27,500) and the value at the time you tried to remove them was now $750,000 you will need to provide the CMHC $37,500 to remove them. It was not a commonly used program because it was very hard to qualify for. In my opinion it will not have a big impact on clients. in 5 years less than 20,000 people have used the program.
The Land Transfer Tax Rebate, First Time Home Buyer Amount (tax credit), RRSP Home Buyers Plan & First Home Savings Account are still sticking around. Not sure what those are? Send us your email and we will email you our First Time Home Buyer Program summary!