The B.C. government is announcing a new program it says will help more British Columbians buy their first home.
B.C. Premier Christy Clark says, under the new B.C. HOME Partnership program, the provincial government will match first-time homebuyers on the total amount that they have saved for their down payment.
That’s up to $37,500, or five per cent of the purchase price, for a maximum property value of $750,000. Clark says it’s an interest-free, 25-year loan with no payments due for the first five years.
After the first five years, homebuyers begin making monthly payments at current interest rates. Homebuyers will repay the loan over the remaining 20 years, but may make extra payments or repay it in full at any time without penalty. The loan must be repaid in full when the home is sold or transferred to another owner.
WATCH: Premier Christy Clark announces details of the BC HOME Partnership program
The program is limited to first-time homebuyers who earn less than the combined $150,000 in household income a year.
“I firmly believe that the dream of home ownership must stay within the reach of the middle class here in B.C.,” said Clark.
“We must make sure it is easier for first-time homebuyers to find their way into a really tough housing market right here. People need a partner in scraping up that first downpayment.”
To be eligible, buyers must be pre-approved for an insured high-ratio first mortgage (mortgage down payment is less than 20 per cent of the home price). On completion of the sale, program funds will be advanced and the loan will be registered as a second mortgage on the property’s title.
Applicants must also be either a Canadian citizen or permanent resident for at least five years and live in B.C. for at least one year. They must also demonstrate they have been paying taxes in Canada for at least two years.
It’s a three-year program and applications will open on Jan. 16, 2017.
Clark says about 42,000 British Columbians are expected to take advantage of it.
The program is expected to cost the provincial government $703 million.
“We are able to make these very significant investments in first-time homebuyers because our economy is strong, diverse and growing.”
Clark says booming B.C. economy is the reason her government is able to afford to invest in first-time homebuyers.
“We are going to take a little stake in someone’s home to help make sure they can get that down payment together,” said Clark. “I think it’s a good deal for every British Columbian.”
Clark says the first-time homebuyer program will be funded by money coming from taxes on property purchases and foreign buyers.
With an election coming up in May, this is the second major announcement the Clark government has made since July.
A 15-per cent foreign buyers tax was introduced in August to correct what Clark calls a “very distorted market.”