Vancouver: If you’re entering the market to buy your first home, the B.C. government is launching a new program to partner with you on the down payment for your mortgage, Premier Christy Clark announced today.
“We believe every British Columbian deserves a place to call home,” said Premier Christy Clark. “We’ve invested in affordable rental housing, we’ve invested in transitional and emergency housing, and now we’re partnering with first-time buyers to make the purchase of their first home more affordable.”
Saving for a mortgage down payment can be hard for first-time homebuyers. The B.C. Home Owner Mortgage and Equity Partnership program contributes to the amount first-time homebuyers have already saved for their down payment, providing up to $37,500, or up to 5% of the purchase price, with a 25-year loan that is interest-free and payment-free for the first five years. Through the B.C. HOME Partnership program, the Province is investing about $703 million over the next three years to help an estimated 42,000 B.C. households enter the market for the first time.
“The first step into the market can be the hardest step, so our government will partner with homebuyers to help them achieve their minimum down payment,” said Rich Coleman, Minister of Natural Gas Development and Minister Responsible for Housing. “This partnership can help lower their monthly costs in the first five years, and help make home ownership more affordable. This partnership program is another important way we’re taking action on housing affordability.”
During the first five years, no monthly interest or principal payments are required as long as the home remains the homebuyer’s principal residence. After the first five years, homebuyers begin making monthly payments at current interest rates. Homebuyers will repay the loan over the remaining 20 years, but may make extra payments or repay it in full at any time without penalty. The loan must be repaid in full when the home is sold or transfered to another owner.
To be eligible, buyers must be preapproved for an insured high-ratio first mortgage (mortgage down payment is less than 20% of the home price). On completion of the sale, program funds will be advanced and the loan will be registered as a second mortgage on the property’s title.
Other programs are available to help first-time buyers save on property transfer tax. 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, which can save buyers up to $13,000 in property transfer tax when purchasing a newly constructed or subdivided home worth up to $750,000.
The B.C. Home Owner Mortgage and Equity Partnership program will start accepting applications Jan. 16, 2017.
The Province’s commitment to housing action is driven by six key principles:
- Ensuring the dream of home ownership remains within the reach of the middle class
- Increasing housing supply
- Smart transit expansion
- Supporting first-time home buyers
- Ensuring Consumer Protection
- Increasing rental supply
- The B.C. government has committed $855 million over five years, including $575 million this year, to support the construction or renovation of 4,900 units of affordable housing throughout the province.
- Since 2001, the B.C. government has invested $4.9 billion to provide affordable housing for low income individuals, seniors and families.
- More than 104,000 B.C. households benefit from a diverse range of provincial housing programs and services.