250 News - Your News, Your Views, Now

October 27, 2017 7:46 pm

Province Announces Plan to Help First Time Home Owners

Thursday, December 15, 2016 @ 11:15 AM

Prince George B.C. – The Province of B.C.   will be offering interest free loans to  first  time home buyers to help them   get into the  housing market.

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.

After the first five years, homebuyers start 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 transferred to another owner.
“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. ”

There are conditions to qualify though  as buyers must be preapproved for an insured high-ratio first mortgage (mortgage down payment is less than 20% of the home price).  Other conditions include:

  • * Have been a Canadian citizen or permanent resident for at least five years.
    * Have resided in British Columbia for at least one year immediately preceding the date of 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).
    * Combined, gross household income of all individuals on title  cannot be over  $150,000.
    * Have saved a down payment amount at least equal to the loan amount for which the buyer applied.

The B.C. Home Owner Mortgage and Equity Partnership program will start accepting applications Jan. 16, 2017.   More information is available here.


A disaster waiting to happen….

Amazing how the Libs are able find all this extra money. Can anyone smell an election in the wind.

    How is it extra? You have to pay it back. Mind you, being that it’s interest free we’ll be losing money in the long run. But hey, people whine about a lack of affordable housing, here’s an option that doesn’t involve a handout.

      How can anyone think a 5 year, interest free loan is anything but a handout is mystifying.

      Here is the kicker to this program, you have to qualify for a Mortgage in order to be eligible for this program. Which means these people already have the appropriate down payment. So an interest free helper shouldn’t be unnecessary.

      This is a total waste of taxpayers money.

      A hand out would be us building houses for people then just handing them the keys.

      This is a hand up. I will help cover some of your costs while you get on your feet; just don’t expect me to pander to your every want.

    You mean you have not heard about the election in May 2017? We knew that when the last election occurred. I think there is a law about election time.

    Then again, given that it is known, they could just shut down the work of government and wait it out till election time ….. then announce their programs in the hopes that people will elect them instead of the others who are promising different policies.

It will help people get their first home especially in places like Victoria, Kelowna and of course the lower mainland where home prices are constantly going up. By the time a young couple builds a down payment the property costs have risen so they no longer have enough to qualify for an insured mortgage.

The risks to the province are limited as it looks like they have their bases covered as outlined in article. About the only things I could think of that would upset the apple cart is if the real estate market cratered or if interest rates spiked big time, both rather unlikley.

Five years down the road there will be about $200 more a month added to their mortgage at today’s rates but by that time they should be all settled in and be able to handle it.

Axman, you are preaching to deaf ears! I’m sure the Looney Leftys including our amorphous TROLL will be twisting themselves in knots trying to figure out how they can put a negative spin on this announcement.
This will most definitely help legitimate first time home buyers acquire their first home, and at the program maximum reduce their monthly mortgage payments by as much as $170 for a 5 year fixed term. A wise person would take those savings and apply them to the principal so they would be able to knock off as much as $10K before they have to start making interest payments on the loan.
All in all a pretty nice little HAND UP for those that are the least likely to be able to afford a home.

I’m for sure voting Liberal in the next election.

    There isn’t a viable alternative….

    You are not going to wait to see if the BC Conservatives, BC NDP, or BC Greens are going to come up with a better plan?

This is something that has been around for years. I got a first home owner grant in 1978. They have put a new name and twist on it to make us think the government is actually doing something for us.
This isn’t NEW

“This is something that has been around for years. I got a first home owner grant in 1978. They have put a new name and twist on it to make us think the government is actually doing something for us.
This isn’t NEW”

I believe the home owner grant you are talking about simply eliminates the property transfer tax on your first home, it doesn’t help you buy a home persay.

“A disaster waiting to happen”

Can you clarify that statement with some examples?

    I also got the first home grant in 1978. I think the property transfer came in 1987.

    Yes. The cole’s notes version: 2 mortgages. If you forgo payments on the second one and only pay down the first bank mortgage, at the end of 5 years you have instantly lost any equity you may have gained in your house.

    Lots of people sell and move within 5 years. You have to clear the first bank mortgage before you can buy another house. But oh oh, you have no equity or down payment for the next house because you have to pay off the second mortgage or carry it with you to the next house. The lender is laughing.

    What if If you’re already only just managing to repay your mortgage. You could lose your home if you cannot keep up repayments on either your mortgage or the second mortgage once the 5 yr no repayment time is done.

    The economy: what if you loose your job? Sell the house or have it repo’d however the second mortgage will follow you around since the province is the lender. Your credit will tank.

    Don’t you remember what happened in the U.S.? Lots of second mortgages were obtained for downpayment assistance on houses.

    Implosion waiting to happen. Clarke is trying to buy votes.

It’s actually good for those of us who already own a home as well as this will bring a whole bunch of new buyers into the market. More buyers equal higher selling prices as the inventory of homes on the market didn’t change.

Considering that there will be a huge crash in the housing market in the next few years, mainly because of the thousands of seniors that will be selling their homes, I would suggest that young people would be better off to wait awhile and get some pretty good deals.

There is not much sense in buying into the housing market at the high end.

Pal you are close to the mark regards very old seniors who have to move/sell due to infirmity, but, there are also thousands of retirees from east of the Rockies that will take up the slack just for the mild climate of the Okanagan and lower mainland. And by the way, saw a chert once of house prices in Vancouver when the interest rates hit 20%: 5% drop for a few months, then continued their upward climb. There hasn’t been a vacant lot for a single family home in Vancouver for many years now.
What amazes me is these new 2 story houses they build in PG for $500,000 with the daylight basements and the massive step sets required just to get to the main floor. Tough on seniors that would rather have a rancher floor plan. Just sayin…

That is certainly the Con way. Give handouts to people who already can qualify for and afford a mortgage without government help.

The analysis at greaterfool.ca this evening is disturbing and hilarious all at the same time . Don’t you just love it when some one tells it like it is . This is classic Barnom and Bailey stuff . I wonder what the interest rate will be in five years ? What are they going to do in 2022 ? Collect.

This is just plain taking advantage of the vulnerable and the financially illiterate so as to try and float a boated ponzi of a housing market at a time of increased interest rates and expected housing market declines.

I heard on the radio today they expect housing prices to drop in Vancouver area by 8% next year. A combination of a big increase in new stock coming to market, the foreign buyer tax, and increased interest rates.

The 5% down is not guaranteed by cmhc… The 5% down is a provincial loan that would have to be paid back no matter if one files bankruptcy or foreclosure and could be with one for life like a student loan… After five years if we have interest rates near the 40 year average of 8% then housing prices could be half where they are today… If they only drop the 8% the Vancouver real estate is expected to drop next year that translates to no equity… Under Canadian mortgage rules no equity means the banks file foreclosure rather than renew the mortgage and the bank doesn’t loose a penny because they collect a 100% on the dollar from the CMHC insurance policy the home owner was required to buy to get the down payment deal (likely an extra $10,000 + cost for insurance wiping out the 5% down payment equity on day one).

Bottom line is its a drive by financing that is likely to leave the home owner with no equity in five years and banks fully insured for a zero equity foreclosure… With no out for the debts to government.

Potential home owner is better off saving the 20% down to avoid CMHC insurance cost eating away at equity and having the bank share the risk of the mortgage thereby insuring they have something to loose in a forcloser and keeping the house and ones credit rating intact long term.

    Essentially the zero interest loan by the provincial government will cover the cost of the required CMHC insurance that give the bank no risk in the loan or its future foreclosure and insures the government takes all the risk at forcloser with the homeowner on the line for its premiums.

    It’s just pumping a ponzi with government guarantees to the housing equity markets.

      Whats it like to live in a world where EVERYTHING that gov’t or business does is a conspiracy against the little people?

What world do you live in where it’s okay to fuel a Ponzi scheme housing market with tax payer dollars for unsuspecting home owners that only win if house price go higher than the record highs they are at with interest rates coming off of record lows. Some gamble there for people that by definition have no equity to spare.

It would be a good policy if interest rates and housing was at historical norms, but this is just another bailout for real estate speculators that want newbies on the hook when it crashes is all it is.

I’m sure the sky in your world is always grey and bleak when everything you see and read evokes another conspiracy Theory!

Comments for this article are closed.