Help for Home Buyers



If you’ve never bought a home before, and thinking about becoming a first-time homebuyer makes you nervous because of rising interest rates, I get it. Properties that were maybe on your “maybe” wish-list a year ago, are possibly seeming a bit unattainable these days because all of a sudden your monthly payments have taken quite a jump. Or even coming up with a down-payment is extra challenging as we exit an incredibly trying couple of years, that has been so hard on people financially. But good news! There is help out there!

Here are three really cool financing incentives to help you buy your first home:

THE HOME PURCHASE PROGRAM (NWT Housing Corporation)

**note, this is geared specifically to residents of the Northwest Territories

This program provides certain NT residents with 5% of the price of the home, to be used towards their down-payment. Now, applicants must be approved, and then complete some course-work, so it’s definitely not easy money by any means, but get this…if you live in the home for the required timeframe, the loan is forgivable. That is amazing! Some highlights:
- Applicants must be first time home buyers and reside in Zone A communities (Fort Smith, Hay River, Fort Simpson, Norman Wells, Inuvik and Yellowknife)
- Clients receive down payment assistance in the form of a forgivable loan subsidizing the cost of purchasing a home.
- For eligible applicants, assistance is 5% of the purchase price or Maximum Construction Costs (MCC), whichever is less.
- The assistance is based on the applicant’s income, family size, the community Core Need Income Thresholds (CNIT) as well as the Maximum Construction Cost (MCC) for the Zone the applicant(s) resides in.

For more information and how to apply, visit: https://www.nwthc.gov.nt.ca/en/services/home-purchase-program

Government of Canada HOME BUYERS PLAN (HBP)

This is one program that I think most people are usually made familiar-with, either via their Real Estate Agent (once they connect with one) and/or their mortgage specialist. The Home Buyers' Plan (HBP) is a program that allows you to withdraw funds from your Registered Retirement Savings Plans (RRSPs) to buy or build a qualifying home for yourself or for a related person with a disability:

- You can borrow up to $35,000
- If there are two people going on title (or three, or four, and so on…) each of them can borrow a maximum of $35,000 from their RRSP’s to use towards the down payment, so long as they are all first-time homebuyers
- This is essentially a loan to yourself for the funds, and you are required to “pay yourself back” in a certain time-period, by putting those funds back into your RRSP’s.
- You must intend to occupy the residence
- You are considered a first-time home buyer if, in the four-year period, you did not occupy a home that you or your current spouse or common-law partner owned.

Here is a helpful link with great information on the HBP: https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/rrsps-related-plans/what-home-buyers-plan/participate-home-buyers-plan.html

CMHC FIRST TIME HOMEBUYER INCENTIVE PROGRAM

The First-Time Home Buyer Incentive helps qualified first-time homebuyers reduce their monthly mortgage payments without adding to their financial burdens. This is done through a shared-equity mortgage with the Government of Canada, which offers:
• 5% or 10% for a first-time buyer’s purchase of a newly constructed home
• 5% for a first-time buyer’s purchase of a resale (existing) home
• 5% for a first-time buyer’s purchase of a new or resale mobile/manufactured home

The shared equity component of the incentive means that the government shares in both the upside and downside of the property value, up to a maximum gain or loss equal to 8% per annum (not compounded) on the Incentive amount from the date of advance to the time of repayment. In simple terms, this essentially means the government of Canada is considered an investor in the purchase of your home, and share in the property value increase or decrease. So for example, if the buyer has 5% of the purchase-price to put towards the down-payment, the Government will match that, and provide 5% as well, for a total 10% down-payment. A few notes (because this one is a bit technical):

- By obtaining the Incentive, the borrower may not have to save as much of a down payment to be able to afford the payments associated with the mortgage. The effect of the larger down payment is a smaller mortgage, and, ultimately, lower monthly costs.
- The homebuyer will have to repay the Incentive based on the market value of the home at the time of repayment equal to the percentage (for example, 5% or 10%) of the original home value used to determine the Incentive, up to a maximum repayment amount equal to:
(i) where the homes’ value has appreciated, the Incentive plus a maximum gain of 8% per annum (not compounded) on the Incentive amount from the date of advance to the time of repayment;
or
(ii) where the homes’ value has depreciated, the Incentive minus a maximum loss of 8% per annum (not compounded) on the Incentive amount from the date of advance to the time of repayment.

Repayment Details

The Incentive must be paid in full
– that is no partial payment
– after 25 years or when the home is sold. There are a few ways where changes to the Incentive can trigger repayment:
• You go through a break up and you want to buy out the co-borrower. If this requires additional insured funds, you must pay back the Incentive in full.
• Porting your mortgage will trigger a repayment of the Incentive.
• A partial release of security is considered a sale and will trigger repayment of the Incentive.

Use these informational pieces to understand more about the incentive.
Repayment Document (PDF): A step-by-step process along with key information.
Appraisal Document (PDF): Appraisal checklist to be provided to the appraiser in the case of a voluntary repayment or at the 25-year mark.
Operational Policy Manual (PDF)
Questions & Answers (PDF)

And for more information, here is the link for the Fed Gov’t FTHB Incentive: https://www.placetocallhome.ca/fthbi/first-time-homebuyer-incentive?utm_source=vanity&utm_medium=redirect&utm_campaign=fthbi

So there you have it! Three REALLY great options to leverage some of your time and money to get you into your first home faster, with potentially lower monthly payments! Big shout out to Julie Kilbride, our local Mortgage Specialist at RBC here in Yellowknife for providing some much-needed clarification, as well as valuable links on all of the above info. And feel free to reach out any time with any questions!
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