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First Time Home Buyer Incentive

The government's First-Time Home Buyer (FTHB) Incentive is now live. A 1.25 billion dollar fund over the next 3 years was introduced in September of 2019. The aim of the program is to help in the reduction of monthly payments without increasing a buyer's down payment. 

Watch my Video here!: https://www.youtube.com/embed/Jz5-1yVm6C8

 

Some conditions are listed below:
1. One applicant must be a FTHB in order to qualify.
2. Maximum qualifying application income is no more than $120,000.00
3. Maximum purchase price is no more than 4 times the application gross income + the clients down payment.
Calculator here: https://www.placetocallhome.ca/fthbi/eligibility-savings-calculator
4. The incentive must be paid back upon sale or after 25 years, whichever happens first.
5. The incentive is 5% or 10% of a new construction home or 5% of a resale home. 

 

Example 1: Resale Home Purchase (5% incentive)
John earns $50,000.00/year and his wife Susan, earns $60,000.00/year for a total gross household income of $110,000.00. John and Susan have saved up $50,000.00 to use towards their down payment.

Maximum purchase price = ($110,000.00 x 4) + $50,000.00 = $490,000.00
Total incentive registered in second position = $24,500.00
This means the clients down payment has now increased to $50,000.00 + $24,500.00 = $74,500.00
The additional $24,500.00 in funds comes with monthly payment savings on the mortgage of $121.46

 

Example 2: New Construction Purchase (10% incentive)
John earns $50,000.00/year and his wife Susan, earns $60,000.00/year for a total gross household income of $110,000.00. John and Susan have saved up $40,000.00 to use towards their down payment.

Maximum purchase price = ($110,000.00 x 4) + $40,000.00 = $480,000.00
Total incentive registered in second position = $48,000.00
This means the clients down payment has now increased to $50,000.00 + $24,500.00 = $88,000.00
The additional $24,500.00 in funds comes with monthly payment savings on the mortgage of $250.31
*The incentive does not activate until the funding date of the mortgage. This means, if the builder requires 20% in deposits, this program will not assist as the money is not provided upfront. Clients will be responsible for fulfilling builder deposit structure. 

 

Common Questions:

1. How is the lean registered?
-It is registered in second position and is non-interest bearing.
2. How much will I have to pay back?
-Payments are 5% or 10% of the home's value at the time of sale. This means, repayment value includes both depreciation and appreciation.
3. Can I refinance?
-Yes, the charge remains in second position.
4. If one borrower is a FTHB and the other is not, can I qualify?
-Yes
5. If the gross application income is >$120,000.00, can I still qualify for 4x a smaller amount?
-No, if the income is >$120,000.000, the clients are eligible for the program. 

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