The BC Provincial Government announces program to help first-time home buyers

In the wake of rapidly rising real estate prices in 2016 the BC Provincial Government announced a province-wide program to support first time home buyers entering the real estate market.

Starting January 16, 2017, the Province will partner with first time home buyers, providing them up to $37,500, or up to 5%, of the purchase price to help those first time buyers achieve the minimum down payment to enter the real estate market.

With a 25-year mortgage loan, the down payment loan is interest-free and payment-free for the first five years. The home must remain the buyers’ principal residence.

Who’s eligible?

To be eligible for the BC Home Owner Mortgage and Equity program, buyers must have a down payment saved equal to half of the required minimum down payment. Buyers must be Canadian citizens or permanent residents for a least 5 years, have resided in BC for at least 1 year, and be a first time home buyer. Buyers must also be purchasing a home with a purchase price less than $750,000. The buyer must be pre-approved for an insured, high-ratio, first mortgage with mortgage down payment less than 20% of the home price. Once the sale completes, funds are then advanced and the loan registered as a second mortgage on the property’s title. Individuals with a gross household income exceeding $150,000 are not eligible. Read all the program details on the Province’s website, BC HOME Partnership.

The BC HOME Partnership program is part of the Province’s commitment to housing affordability and supporting first time home buyers.

The First Time Home Buyers Program can save first time buyers up to $7,500 when purchasing a home valued up to $475,000. Or, first time buyers can access the Newly Built Homes Exemption. This exemption can save buyers up to $13,000 in property transfer tax when purchasing a newly constructed or subdivided home worth up to $750,000.

It’s an interesting program. We think the first mortgage lender is going to need to know in advance if you plan to have a second mortgage registered on title… Best advice is to talk to your mortgage broker for more details.