First Time Home Buyer

CMHC has launched a new incentive program for First Time Home Buyer in September 2020. The main motive of this program is to support the First Time Home buyer by contributing a percentage (5% – 10%) of the value of the home they want to buy. It helps the first-time home buyers to borrow a smaller mortgage amount and as a result the monthly mortgage payment is also reduced.

This incentive is based on the type of property: –

Property DescriptionIncentive Percentage Amount (%)
Builder Purchase5% or 10%
Resale5%
New and existing mobile/manufactured home5%

The criteria below ascertain your eligibility for this program: –

  1. Applicants must be first time home buyers
  2. Must be Canadian Citizen, Permanent Resident or Temporary Resident legally working in Canada
  3. Property should be located in Canada only
  4. Household income should not be more than $120, 000
  5. Total borrowing (Mortgage + Incentive) should not be more than 4 times your annual income
  6. The downpayment should come from traditional sources (savings, RRSP, non repayable gift etc.) and not from borrowings.

This incentive is a Shared-Equity Mortgage with the Government. There is no interest payable under this incentive program, however, it has to be paid back based on the property’s Fair Market Value after 25 yrs, or when the house is sold whichever comes early. The homebuyer can also prepay any time without any penalty. The amount to be paid back by the homebuyer is the incentive percentage (5% or 10%) of value of home at the time of repayment.

If the borrower decides to refinance the house, they should always consult their lender if the incentive has to be paid back.

(for information purpose only and does not constitute complete guidelines)

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