Saving for a mortgage down payment can be hard for first-time homebuyers. 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. Through the B.C. HOME Partnership program, the Province is investing about $703 million over the next three years to help an estimated 42,000 B.C. households enter the market for the first time.
“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. This partnership program is another important way we’re taking action on housing affordability.”
During the first five years, no monthly interest or principal payments are required as long as the home remains the homebuyer’s principal residence. After the first five years, homebuyers begin 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 transfered to another owner.
To be eligible, buyers must be preapproved for an insured high-ratio first mortgage (mortgage down payment is less than 20% of the home price). On completion of the sale, program funds will be advanced and the loan will be registered as a second mortgage on the property’s title.
Other programs are available to help first-time buyers save on property transfer tax. The First Time Home Buyers Program can save first-time buyers up to $7,500 when purchasing a home valued up to $475,000. Or, first-time buyers can access the Newly Built Homes Exemption, which can save buyers up to $13,000 in property transfer tax when purchasing a newly constructed or subdivided home worth up to $750,000.
The B.C. Home Owner Mortgage and Equity Partnership program will start accepting applications Jan. 16, 2017.
B.C. Home Owner Mortgage and Equity Partnership program details
Am I eligible for a partnership loan?
The program supports eligible first-time homebuyers who are approved for an insured high-ratio first mortgage. To qualify for the program, all individuals on title must:
- Have been a Canadian citizen or permanent resident for at least five years.
- Have resided in British Columbia for at least one year immediately preceeding 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).
- 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.
What do I do and how do I apply?
Step 1: Get preapproval for an insured first mortgage from your financial lending institution.
Step 2: Apply to BC Housing for the B.C. Home Owner Mortgage and Equity Partnership program loan. If you are eligible, you will receive confirmation of eligibility and Homebuyer’s Kit, which includes information for your lender, real estate licensee, and lawyer/notary public.
Step 3: Find your home and provide the details of your planned purchase to BC Housing for approval.
Applications for the program will be accepted starting Jan. 16, 2017, for purchases that will close on or after Feb. 15, 2017.
What information will I need to apply?
Buyers can begin gathering the documents they’ll need to submit an online application. Buyers will need:
- Proof of status in Canada and residency in British Columbia.
- Secondary identification (must include your photo).
- Proof of income and tax filings.
- Insured first mortgage pre-approval.
Strictly Taken from the BC Housing website
A Canadian Certified Immigration Consultant, Certified Senior Advisor and a Notary Public in the City of Burnaby, Editha Corrales Nelson’s preferred areas of practice are Powers of Attorney, Wills Preparation, International Legal Documents, Name Changes, Affidavits, Letters of Invitation, Statutory Declarations, Drafting of Business Contracts and other notarial services. For an appointment, please call: 604-777-2757.
The following should not be construed as providing legal advice and information in this column is intended only as a general guide and should not be applied to specific circumstances without further consultation. For more information on the subject, contact Editha Corrales Nelson at 604-777-2757 or email: corrales@shaw.ca.