Canada Mortgage and Housing Corp. (CMHC) reportedly discontinues Canada’s First-Time Home Buyer Incentive (FTHBI) effective today.
The deadline for new or updated submissions to the program is midnight eastern time on March 21 at midnight eastern time, CMHC said in a statement and added that applications submitted after the deadline at midnight eastern time will “undergo a manual review.”
The statement also said that requests for manual reviews will need to be submitted by March 25, also at midnight eastern time. and that “no new approvals will be granted” after March 31.
Introduced by the Liberals in their 2019 budget, FTHBI came into effect in Sep 2019.
Aimed at facilitating young people to buy their first home, FTHB program lowered new buyers’ monthly mortgage payments and making home ownership more affordable
The government offered a loan up to 10 percent of the purchase price that would go toward a larger down payment and thereby reducing monthly payments.
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 by absorbing five percent of monthly mortgage payments on existing homes and 10 percent on new builds.
Homeowners had 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, especially amidst real estate, interest rate and economic uncertainty.
According to figures from the federal government’s National Housing Strategy website, the program had a budget of up to $1.25 billion, with around $408.92 million utilized. The program had a target of assisting up to 100,000 homebuyers, with about 22,826 partaking in the initiative.
James Laird, the co-CEO of Ratehub.ca and president of CanWise mortgage lender has reportedly said in a statement that the policy was marked by significant flaws.
“If only the federal government had paid attention to a similar program failing in B.C. years prior, they would have saved taxpayers millions,” he said.
