CMHC ends first-time homebuyer incentive | CBC News


The first-time homebuyer incentive has been discontinued by the Canada Mortgage and Housing Corporation (CMHC), the federal agency announced on Thursday.

The deadline for new or resubmitted applications to the program is midnight ET on March 21, 2024, according to the CMHC’s website.

Launched in 2019, the plan was meant to help reduce monthly mortgage payments for first-time buyers by having the government take on partial ownership of a property.

The government offered a loan up to 10 per cent of the purchase price that would go toward a larger down payment and thereby reduce monthly payments.

Homeowners have to repay the incentive after 25 years or when the property is sold, with the amount owing adjusted to reflect how the value of the property has changed.

The program was hampered in part by eligibility issues, including limits to household income and the size of a mortgage the buyer could take on.

Apoorva Pande, a first-time homebuyer in Toronto, said he and his wife wouldn’t be eligible for the incentive because their combined income is too high to qualify. The maximum allowed is $150,000.

“Ideally, they should have increased that limit, but [it’s] unfortunate that it’s actually getting scrapped,” he said.

Pande said he and his wife have been house-hunting for two years.

“There’s just basically chronic shortage of supply,” said Pande. “Therefore, when so many people are looking to buy houses … you can expect multiple offers on the same house. And then you don’t want to get into a bidding war and pay beyond your means.”

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Restrictions made only a small pool of applicants eligible

“We had a lot of young Canadians asking about this program,” said Leah Zlatkin, a mortgage broker in Toronto.

However, applicants were required to meet specific criteria — including qualifications related to annual income and cash savings —  that made the program restrictive. Only two of Zlatkin’s clients qualified for it in the entire time that program was running, she said.

Other clients bowed out when they understood that they’d be entering a co-ownership agreement with the government.

“When they understood it was a shared equity program, many people weren’t as interested,” said Zlatkin. They ended up financing elsewhere, because they didn’t want to share the equity as it appreciated, she added.

While Zlatkin thought the program was a good idea, it was “an administrative nightmare,” with the cost of the administration involved far outweighing the number of successful applicants, she said. 

“If so few people are actually utilizing the program, why run it?”


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