Home Partnership Program Open for Applications
Prince George-Valemount Liberal MLA Shirley Bond – photo 250News
Prince George, B.C. – Attention first-time homebuyers.
Starting today, those individuals can apply to the B.C. Home Owner Mortgage and Equity Partnership program for help buying their first homes.
The initiative is designed to help first-time homebuyers who can afford the costs of home ownership but who are having trouble putting together a down payment.
The program contributes to the amount first-time buyers have already saved for their down payment, providing up to $37,500, or up to five per cent of the purchase price, with a 25-year loan that is interest-free and payment-free for the first five years.
To qualify, buyers must first qualify for an insured high-ratio mortgage, to ensure they can afford the payments.
The provincial government estimates it will invest about $703 million over the next three years to help an estimated 42,000 households enter the housing market for the first time.
To determine your eligibility, click here.
Comments
This means us taxpayers will be taking on more financial risk because it will be our government who is on the hook if buyers default on their mortgage payments. Most of the experts agree this program will drive housing prices up and encourage people to take on more debt. If you are a first time home buyer and you don’t have enough money for a down payment, you should not be taking on more debt.
This is an election gimmick, can I have some more BRIC shares as well please?
Actually, it’s worse. This 700 million will be out there for 5 years before the borrower has to start making payments. The government, who clearly has no cash, will have to borrow this money to lend this money, and pay interest on this money for 5 years. I figure at 3% the province will use 105 million tax dollars up for interest on a program to help someone buy a house. And I’m thinking they’ll be expecting me and others like me to pay those taxes.
Fact is, each person taking advantage of this program will get $5,250.00 tax free in interest not paid.
And yes, for those who cannot pay, taxpayer will be on the hook for the principal and interest.
Meanwhile, we’ve got schools that need replacing, we’re doing fundraising to build a new Children’s hospital, the twinning of 97N is going painfully slow. Wow, gotta love these priorities.
That said, is it’s not so much that I like the Liberals, I just see them as less incompetent than the NDP – but incompetent none the less.
And yes BH, this is me agreeing with you.
Dear first time home buyers. We, the BCLibs would like to help you get further into debt than is currently possible, using tax payers dollars, in order to help our home construction and real estate developer donors make more and more money.
You have that right Fate. 50 grand of that goes directly into Christies pock too.
*every year.
I support the provincial Liberals but I DO NOT support this program!
Nobody helped me buy my first house, or any of my houses for that matter. Nobody helped me start or build my business.
If you can’t afford to buy a house in Vancouver, find a job somewhere else, where you can afford to buy a house, like for instance Prince George!
I don’t have a burning desire to have my tax dollars help others after doing it all myself and I suspect that the silent majority agrees!
I am BC liberal supporter. I also do not support people to buy houses who really can not afford it. It is setting them up for failure.
Remember the US in 2008 September when the poop hit the fan, this was caused primarily because of the US allowing unqualified buyers to buy homes.
Read history, so you don’t make the similar mistakes.
Full steam ahead, Christy. Rack up that debt. According to the Con twits on this site, you are a financial wizard at managing the BC debt and economy. Look at these two. They will vote for you regardless. So, in spite of their whining, they will be willing to pay whatever it takes to keep the NDP from forming the government.
Hahaha had to laugh over that comment. But you are right if the NDP are to form the next government people have to be real careful where they put their money today as they can buy that same house in 4 years for fire sale prices
Collapsed real estate prices are going to happen regardless of who is in power.
Not everyone lives in PG or Vanderhoof. Prices in Yale, yes the little boarded up podunk town in the middle of nowhere north of Hope went up 40% last year. A 1,000 sq foot 2 bedroom apartment is north of 400k in Burnaby, prices are rising faster than people can save for a down payment. This will help although 37,500 is for a house valued at 750k. Most people buying in smaller towns at 250k will have a chance to borrow 12,500 down payment. My first home was CMHC insured, unless you have 25% down your mortgage will be insured also.
What makes one think that “taxpayers” will be on the hook? The insurance covers the loan for default does it not?
It must be hard for the Christy Clark Liberals to defend a program that most experts are slamming. “Joshua Gottlieb of the Vancouver School of Economics says instead of promoting home ownership, the province’s policy promotes owning a small fraction of a home while taking on big risks with borrowed money, a risk that taxpayers could be on the hook for if buyers default on mortgage payments.”
ht tps://www.msn.com/en-ca/money/topstories/housing-experts-slam-bcs-homeowner-loans/ar-BBxsyv5
I see your article and substitute one of my own
ht tp://www.macleans.ca/economy/is-b-c-s-plan-for-first-time-homebuyers-as-crazy-as-it-sounds/
The only barrier to these buyers from owning rather than renting is the ability to come up with enough down payment as they already qualify for the mortgage
Cmhc covers the mortgage not the down payment. If they default Cmhc will make the bank whole but the down payment financed by a loan is not insured.
The loan is secured as a second mortgage
This program does nothing to prevent “prices rising faster than people can save for a down payment”. It encourages them to rise further. And on that rise will be based future property tax assessments, and on them, future property taxes… Which will go up. Part of that rise will fund the interest the government pays on the money borrowed for five years before it gets any homeowner payments back on it. So WE, all of us who’ve funded our own home purchase without this handout, get to pay again, in increased taxes, to fuel an already over priced home market. Sure, it benefits us in a higher price for our houses when we want to sell, but only so long as we’re not going to buy another house, (at least in the same area we’ve just sold one in.)
CMHC is a Crown Corp. Ultimately, any money they pay out to cover mortgage defaults is going to come out of the pockets of taxpayers. That is what happens when your entire system is orientated to protecting the interests of bankers above all else.
CMHC is not the only insurance provider, there are two other approved mortgage insurance providers
Way back in the olden days…………1970’s
I took advantage (I thought!) of what they called the
“B.C. Second Mortgage”
It was a fixed amount, $5,000.00, intended to help you raise enough money for a down payment on your first house. Amortized over 20 years, I believe.
That, plus some savings I had, got me into my first house.
There was interest charged on the $5,000.00 of course.
I paid it out in about 7 years or so, ironically, the pay out was about $4,400.00, almost exactly the same as I had paid them in monthly payments.
Thus, the government of B.C. loaned me $5,000.00 but got paid back nearly $9,000.00 in less than 7 years. Pretty good business for them.
Why can’t the Christie Clark Liberals emulate the old B.C. Second?
Low monthly payments, a reasonable interest rate, everybody wins.
It would still help first time home buyers, and the interest collected would, in the long run, help boost general revenue.
metalman.
They will only match what you put in so you have to raise at least half of the down payment before you qualify.
PS metalman, the loan is only interest free for the first 5 years then interest starts to kick in along with repayment
Yes very similar to the BC second mortgage, it was actually called the “Socred BC Second Mortgage program” from the Vancouver Sun in December. The only real difference is this second mortgage comes due if the title changes or the residence is no longer the borrowers principle residence in the first 5 years.
Because it didn’t raise the prices of houses. That mortgage scheme was initiated by the Bill Bennett Socreds. As I recall they only had it in place for a limited period of time, but it was quite popular while it lasted.
As for those BCRIC shares…. That was an idea that was actually sound, only it should never have been done the way it was. ‘Conglomerates’, which was what BCRIC was, were already on their way out when those shares were distributed. What really should have happened was to give us shares in the various companies that were consolidated into BCRIC. There would have been some failures, but more successes, if the Socreds had done that.
And how exactly does the same program now raise prices? Because some assistant prof thinks so? Lots of others believe the increased prices are due to under supply not lack of buyers
So you can’t get deep enough in debt…well let your liberal government show you how..they are experts at it..
Just think what will happen when the interest rates start creeping back up… will be more foreclosures with more young lives so deep and debt they will never get above water.
It’s not just the possibility of rising interest rates in the future that new homeowners need to worry about, add to that the very real possibility that with homes and residential real estate at record highs, the market has no where to go but down!
Can you imagine buying a house for $750,000 and, five (5) years from now, making payments on a $750,000 mortgage AND a down payment loan on a house worth only $500,000? Very real possibilities. As far as I am concerned the BC Liberals need to be more up front about these “risks” to first time home buyers!
They already qualify for the mortgage, they are just lacking in the down payment department.
You are saying this risk is only for first time home buyers? What if prices increase another 20 percent next year? You saying people should not buy a home because prices could drop? Everyone buying a home knows the risk, but that is the beauty of real estate – in the long run it goes up. What are prices like now for real estate since 2008? If people bail on a house over a dip in prices it is not because they live in it – it is because they are a speculator. A dip in prices does not mean your mortgage goes up, it stays the same over a 5 year term. A dip in prices does not change your financial position to make the payments.
But I do see your point that if the If the NDP were to get in next election there is a risk for the housing market to tank
Crony capitalism at it’s finest. What a sham. I truly hope this is the nail in BC Liberals’ coffin. They need to be thrown out with the foul bathwater.
This whole process is full of holes.
As an example your debt must not exceed 40% of your household income. So how do you do the calculation for the loan of $37,500.00. We know that it is interest free for the first five years of the mortgage, however after that you have to make a payment plus interest. So is this **loan** going to be calculated as debt, and effect your ability to borrow.?
The maximum you can pay for a house and still be eligible for this **loan** is $750,000.00.
Its interesting to note that to qualify for this loan you have to be a Canadian Citizen for 5 years, and must have spent the last 12 months in the Province of BC.
So, if you have lived in BC for 12 months you can get the loan, and the Province will finance it, however at that point in time you have only contributed taxes to the BC Government for one year, more or less.
Another interesting aspect is that in order to be eligible for the loan you and any others on the title must use the house being purchased as their principle residence for the first five years.
If you look up the meaning of **principle residence** you will see that all that is required is that anyone on the title has spent some time at the residence during the year. So in fact you could get a loan, purchase this house, build yourself a bedroom in the basement, and sleep there once or twice a year, and Walla, it is your principle residence. Then you could rent it out for the five years, and then sell it,. Hmmmmmm.
Yes it becomes a second mortgage, Macleans has an article on it. This was rolled out in December but just came into force now.
Banks have all this info and know how to calculate household income according to CMHC rules
They match your down payment with a 25 year loan, thus to receive 37,500 on a 750,000 house you have to put in 37,500 as well
If you can’t save up the down payment, you cannot afford the house. When government tries to induce you into teaming up with them, you will be forever beholding to them. Choose your partners carefully. I do not support or encourage my family, friends or business associates to consider this offer. Thanks, but no thanks.
So those who can’t save up 20% for a mortgage maybe shouldn’t qualify for a home mortgage either by that logic. If you have less than 20% to put down then you have to go through cmhc so that your mortgage is risk free to the bank essentially. In other words if you can come up with 5% you can still qualify for a mortgage as long as you pay 1% insurance, so how is a helping hand any different? You save 5%, the govt kicks in 5% and the savings you have on the lower interest over the term of the mortgage will amount to about the same as the 5% the gov’t lends you. I don’t see what the problem is.
Hogwash, if you can’t save up the down payment you can’t afford the house is not true. You still have to qualify with 40 percent total debt. Some people starting out – yes this is a first time home buyer requirement – have done well if their debt is only 40 percent of their income. Most loans are 50 percent or more. Given time they could save up a down payment, matching their down payment ensures they have saved some. With prices hitting 40 percent increases after 20-30 percent the year before even those with large savings are seeing the dream of home ownership slipping away. If you pay the same in rent as you would owning a home then why force them to keep renting for another 10 years to save up 5 percent? Also if they have 5 percent but the perfect house is just out of reach they can use these funds to step up to the next level. It can be used to match your 5 percent to a total of 10 percent down which also lowers the percentage payable to the mortgage insurer and also your interest rate in some cases. Completely makes sense for a buyer as they also have an additional 5 years to pay off the second mortgage if they wish.
Talk about an oxymoron. If you are having trouble putting together a down payment for a house then you can’t afford to buy one. Well, except in the eyes and minds of Con politicians desperately seeking re-election.
Your reasoning is false. You can borrow your down payment, nothing anywhere says you can’t. Has been that way since the beginning of mortgages. Problem is a lot of these people who qualify for a mortgage pay the same amount for rent and can’t come up with 20,000 on the spot. They could get a loan through the bank but those are not amortized 25 years so your 40 percent is exceeded on the payments to that loan. Some can borrow off relatives and then get the loan after the mortgage but a second mortgage makes sense as over 25 years the payments are a lot lower. This is not a rich getting richer scam as your household income is capped at 150k per year and you as the borrower have to be a first time home buyer and live there as a principle residence for 5 years. It is not like a car where you now have 84 month payments and your equity never exceeds the loan until your last 6 months, land retains its equity even when you drive it off the lot
From an overall macro perspective, this is the way I witnessed everything unfolding with the housing situation in BC (lower mainland). The BC Lib-Cons did nothing for years as housing prices climbed into the stratosphere down in the lower mainland, in keeping with their “the market will manage itself” mantra.
So as housing prices reached such high levels that it essentially became a barrier for first time home buyers, those buyers started to complain. Where upon, Housing Minister; Rich Coleman stated; “Quit Your Whining”.
ht tp://www.news1130.com/2016/05/26/housing-minister-whining-critic/
Now the BC Lib-Cons see a serious problem when the situation becomes a “Housing Crisis”, and they come up with this hair brained scheme to implement a Home Partnership Program, which experts say will push housing prices even higher because of an increase demand for homes by first time home buyers.???
Wow, we have some real geniuses running this dog and pony show don’t we!!!
So governments are supposed to control real estate prices now?
The answer is yes, unfortunately this came way too late to prevent a “housing crisis” in the lower mainland housing market.
ht tp://money.cnn.com/2016/08/02/real_estate/vancouver-foreign-property-transfer-tax/
They don’t control real estate prices never have and never will.
They can control foreign interests speculating in a market once that has been determined to be happening, but that doesn’t control prices. You may note prices are still on the rise. The only way they could control prices would be to build houses and sell them at a loss or gain depending on where they wanted the market to be, they can assist people getting into the market which is what a second mortgage does but it does not control prices. Supply and demand determines prices.
Look at the mooks on Vancouver Island. There wasn’t a squeak about other British Columbians having to pay two tier rates for their electrical heating, until the Lotus Land Lizards got hit with a cold snap and saw THEIR electrical bills go through the roof. Now, all of a sudden, it is an issue that the SoCreds are going to have “investigated”.
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