The First Time Home Buyer Incentive is a government program aimed at helping first-time homebuyers get into the Canadian housing market. The program was introduced in 2019 by the Federal Government and is available to eligible homebuyers in Canada. In this blog post, we’ll take a closer look at how the First Time Home Buyer Incentive works, who is eligible, and how to apply.

How the First Time Home Buyer Incentive Works

The First Time Home Buyer Incentive works by offering eligible homebuyers a shared equity mortgage with the Government of Canada. This means that the government will provide a portion of the home’s purchase price, reducing the amount that the homebuyer needs to borrow. The government’s contribution will increase the homebuyer’s equity in the home, and they will not need to make any payments on the amount provided by the government.

The amount of the shared equity mortgage will be 5% or 10% of the home’s purchase price, depending on the type of property and the amount the homebuyer borrows. For example, if the homebuyer purchases a home for $400,000 and qualifies for a 10% shared equity mortgage, the government would provide $40,000 towards the purchase price.

Who is Eligible

To be eligible for the First Time Home Buyer Incentive, you must meet the following criteria:

  • You must be a first-time homebuyer or have not owned a home in the last four years.
  • Your total household income must be less than $120,000 per year.
  • The home you are purchasing must be located in Canada and must be your primary residence.
  • The home must have a purchase price of less than $500,000.

How to Apply

To apply for the First Time Home Buyer Incentive, you will need to work with a participating lender. You will also need to provide documentation, such as proof of income and a purchase and sale agreement, to the lender. The lender will then submit your application to the Canada Mortgage and Housing Corporation (CMHC), which will determine your eligibility for the program.

In conclusion, the First Time Home Buyer Incentive is a valuable program for eligible first-time homebuyers looking to get into the Canadian housing market. If you meet the eligibility criteria, working with a participating lender and applying for the program can help you get into your first home with a lower mortgage amount and increased equity. Be sure to speak with a financial advisor or a mortgage specialist to better understand your options and the best choice for your situation.