The BC provincial government has announced a plan to help first-time homebuyers get into the housing market.
The BC Home Owner Mortgage and Equity (HOME) Partnership program will contribute to the amount first-time homebuyers have already saved for their down payment.
The program will provide up to $37,500 (or up to 5% of the purchase price) with a 25-year loan that is interest-free for the first five years.
“We believe every British Columbian deserves a place to call home,” Premier Christy Clark said in a release.
“We’ve invested in affordable rental housing, we’ve invested in transitional and emergency housing, and now we’re partnering for the first time with first-time buyers to make the purchase of their first home more affordable.”
The Province will be investing about $703 million over the next three years to help over 42,000 first-time buyers purchase their first home.
“People need a partner in scraping up that first down payment,” Clark said at a press conference on Thursday. “Our BC government wants to be your partner if you want to buy your first home.”
“The dream of home ownership must stay in the reach of the middle class here in British Columbia.”
To be eligible for the loan, first-time homebuyers must be approved for an insured high-ratio first mortgage. They also must meet the following criteria:
- Have been a Canadian citizen or permanent resident for at least five years
- Have resided in BC for at least one year preceding the date of the application
- Be a first-time buyer who has not owned an interest in a residence anywhere in the world at any time
- Use the property as their principal residence for the first five years
- Purchase a home that has a purchase price of $750,000 or less (excluding taxes and fees)
- Obtain a high-ratio insured first mortgage on the property for at least 80% of the purchase price
- Have a combined, gross household income of all individuals on title not exceeding $150,000
- Have saved a down payment amount at least equal to the loan amount for which the buyer applied
During the first five years, there will be no monthly interest or principal payments as long as the home remains the home buyer’s main residence.
After the five years, homebuyers will make monthly payments at current interest rates. The loan can be paid off over the remaining 20 years. However, they can make extra payments or repay it in full anytime without a penalty. The loan also must be repaid in full when the home is sold or transferred to another owner.
Applications for the BC Home Partnership open January 16, 2017.