First-Time Homebuyer Incentive Cancelled

Will there EVER be a First-Time Home Buyer Program that WORKS?!

Because this last program (CMHC’s) “The First-Time Home Buyer Incentive Program” is/was horrendous!

Why is/was it so bad?

Too restrictive, didn’t help homebuyers with qualifying, and little benefit.

This program is/was designed for First time home buyers who ALREADY qualified for the mortgage. Only AFTER THEY QUALIFIED were they provided with a 5% or 10% interest-free loan for a portion of their equity.

Due to the upper limit lending restrictions, the benefits of taking an interest free loan with this program worked out to a mortgage savings of $150 – $300/m. The downside, well you would have to give up a portion of your equity.

The additional downside, well, you also have to qualify 100% ON YOUR OWN for the purchase of your new home before CMHC decides to step in and offer a “helping hand.”

Think of it like this, you’ve been training for years to run a marathon, and you finally decide this is the year I’m doing it! The race day comes, and you’re prepared and ready to go. As you’re running you surprise yourself, hey this isn’t so bad, just a little further to go! Then.. up ahead you see the finish line, only 50 meters left! You think to yourself, I just need to keep on pushing only a little more to go, but wait, table full of baked goods appears out of nowhere and a massive sugar rush comes over you right at the very end! There’s no way you can continue running another 25m without having a delicious cinnamon bun!

Unbelievable, right? Well, that’s essentially what this program is/was.

Here’s the good news, CMHC can now recalibrate and focus on building out an incentive program that actually makes sense. Hopefully one that helps first time home buyers qualify.