So what exactly did the Provincial Government announce yesterday?
The BC Home Owner Mortgage and Equity Partnership (BC HOME Partnership) assists residents of British Columbia who are eligible first time homebuyers by providing repayable down payment assistance loans.
About
The program will contribute to your down payment amount to a maximum of 5% of the purchase price. You must ensure to still meet the minimum downpayment requirements set by the government also. The BC HOME Partnership loan is for an initial 25-year term, which is interest and payment free for the first five years. The loan will be registered on your property title as a second mortgage. This program will match your down payment you have saved to a max $37,500 or 5% (whichever is lower).
Who Can Apply?
To qualify for BC HOME Partnership loan anyone on title of the home must meet the following criteria:
- Be a Canadian citizen or permanent resident that has resided in BC for at least five years.
- Have lived in BC for at least the full 12 months preceding your application.
- Be a first time homebuyer who has not owned an interest in a principal residence anywhere in the world at any time and has never received a first time homebuyer exemption or refund.
- The combined, gross household income of all individuals on title must not exceed $150,000.
- The home being purchased must be used as the principal residence of all individuals on title for the five years after purchasing.
- Purchase a home that is $750,000 or less.
- Be eligible for a high-ratio insured first mortgage for the home
How do I apply?
Apply online with BC Housing beginning January 16, 2017. Note your closing date can not before February 15, 2017.
How do I repay the loan?
The first 5 years is interest free however you may make additional payments or repay in full at any time without penalty. At the beginning of the sixth year you will begin making principal and interest payments, amortized over the remaining 20 years. The initial interest rate on the fifth anniversary will be outlined in the Conditional Loan Approval letter you receive. The interest rate will be reset at the Royal Bank of Canada Prime Rate plus 0.5% at each of the 10th, 15th and 20thanniversary dates.
The loan is payable in full should you default on the first mortgage or the BC HOME partnership loan, transfer partial or full ownership of property or the home is no longer your principal residence in the first five years.