First Time Home Buyer Incentive


The First-Time Homebuyer’s Incentive program was launched on September 2nd, 2019. It is a $1.25 billion program over 3 years created to provide Canadians with a greater down payment on their first property, in the form of a non-interest bearing loan. The non-interest bearing loan will result in reduced mortgage payments for the property owner and allows more individuals to qualify for property ownership.
In order to qualify for the non-interest bearing loan individuals must meet the following criteria:
• have the minimum down payment to be eligible for the program
• maximum qualifying income is no more than $120,000
• total borrowing is limited to 4 times the qualifying income
• be a Canadian citizen, Permanent Residents or a non-permanent resident who is legally authorized to work in Canada

If this criteria is met, individuals can then apply for a 5% or 10% shared equity mortgage with the Government of Canada. A shared equity mortgage is where the government shares in the increase or decrease in property value at the time of sale.

How does the First-Time Home Buyer Incentive work?
The interest free loan enables first-time homebuyers to reduce their monthly mortgage payment without increasing their down payment. The Government loan is non-interest bearing and does not require ongoing repayments.

Through the First-Time Home Buyer Incentive, the Government of Canada will offer:
• 5% for a first-time buyer’s purchase of a re-sale home
• 5% or 10% for a first-time buyer’s purchase of a new construction property

How much do I have to pay back to the Government when I sell my property?
The interest-free loan can be repaid at any time in full without a pre-payment penalty. The interest-free loan must be repaid after 25 years or if the property is sold, whichever happens first. The interest-free loan repayment amount is based on the property’s fair market value on the loan due date. Here are a few examples:
• Property owner received a 5% incentive of the home’s purchase price of $200,000, or $10,000.
If the home value increases to $300,000 the amount due back to the Government would be 5% of the current value or $15,000.
• Property owner received 10% incentive of the home’s purchase price of $200,000, or $20,000. If the property value decreases to $150,000, the repayment value will be 10% of the current value or $15,000.

What properties are eligible for funding?
Eligible residential properties that can be purchased under this program include:
• new construction
• re-sale home
• new and re-sale mobile/manufactured homes

Residential properties can include 1 to 4 units
Types of residential properties include:
• single family homes
• semi-detached homes
• duplex
• triplex
• fourplex
• town houses
• condominium units

For more information go to: