The provincial government is introducing a program they say will help potential first-time home buyers who have been waiting on the sidelines to get into the game.
It’s called the “B.C. Home Owner Mortgage and Equity Partnership” program, and it’s a 25-year loan that’ll be interest-free and payment-free for the first five years.
The program will either match down payments dollar for dollar up to $37,500, or five per cent of the purchase price on a 25-year loan.
That means during the first five years, no monthly interest or principal payments are required.
Clark says there’s no concerns however that this new program will drive up demand in a housing market that only now is beginning to cool off.
“Our analysis tells us that it won’t because everybody that’s going to be eligible for this program will have to have been accepted for a mortgage already. They will all be people who can afford to buy a home.”
But there are strings attached, you’ll need to be pre-approved for an insured high-ratio first mortgage.
The home must be the home buyer’s principal residence, it’s capped at homes up to $750,000, and your total family income can be no more than $150,000 a year.
The province estimates they’re investing about $703 million dollars over the next three years to help 42,000 B.C. Households enter the market.
Meanwhile NDP MP David Eby says the government’s new interest-free, down payment plan helps first-time home buyers with more debt, and rewards real estate developers who are major donors to the B.C. Liberal Party.
The Opposition’s housing critic says the government could have helped first-time buyers by building affordable properties on available land in Metro Vancouver.
Eby says, “We really think that the government should be looking at protecting the interests of these first time home buyers so they don’t have to take on so much debt to get into the housing market, because they’re already swimming in debt. So it’s bizarre to me that they’re going the other way… the only explanation that I can think of is that they want to reward their donors”
Online applications for the three-year program will be accepted starting next month.