CMHC First Time Home-Buyers Program

CMHC First Time Home-Buyers Program

As Abbotsford Mortgage Brokers, we’ve taken it upon ourselves to write up all the information that you need to know about the new “CMHC First Time Home-Buyers Grant”.

 

2019 federal budget includes tantalizing pitch for prospective first-time home-buyers

  • An applicant must make a household income of under 120,000 per year to qualify
  • Applicant must be able to come up with a minimum down 5% payment
  • The programs caps out 4 times the applicant’s annual income
  • Which means the loan can only help homeowners buy properties where the mortgage value plus CMHC loan doesn’t exceed 480,000
  • So, if the 1st time home buyer approved all conditions above, CMHC would kick in up to 10% of the values newly built home.
  • Co signers are permitted as long as the combined annual income is no higher than 119,999
  • Stress test for these mortgages do not apply with the loan. The loan is considered cash.

What CMHC wants in return:

  • In exchange for an equity stake in the home (so the funding comes with a bill to be paid)
  • If a buyer wants a 400,000 house – they got to come up with 20,000 min
  • 380,000 loan — 40,000 in funding = 10% stake in your home —-Bringing mortgage down to 340,000 w/ standard %3.5 interest, bringing payments down $200/month = 2700 in savings/year
  • Pay when you sell your house or sooner, it’s up to you.
  • CMHC shares in a – Loss OR Gain – of the value of profit
  • Loan must be paid in full no later than 25 years of purchase
  • Enough for 100,000 new buyers over the next 3 years.

Taking out new loans from CMHC or retirement savings doesn’t make housing more affordable, It just allows another source of debt financing that must be repaid.

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