SIMPLIFIED: B.C. HOME OWNER MORTGAGE AND EQUITY PARTNERSHIP PROGRAM

B.C. Home Owner Mortgage and Equity partnership program information:

Purpose:

· To assist first-time homebuyers in BC to enter the real estate market by specifically targeting buyers who may not have sufficient resources to meet capital requirements (down payment)


Eligibility:

· Have been a Canadian citizen or permanent resident for at least five years
· Have resided in British Columbia for at least one year immediately preceding the date of application

· Be a first-time buyer who has not owned an interest in a residence anywhere in the world at any time

· Use the property as their principal residence for the first five years

· Purchase a home that has a purchase price of $750,000 or less (excluding taxes and fees)

· Obtain a high-ratio insured first mortgage on the property for at least 80% of the purchase price

· Have a combined, gross household income of all individuals on title not exceeding $150,000

· Have saved a down payment amount at least equal to the loan amount for which the buyer applied


Benefits:

· Interest free loan for the first 5 years
· Allows access into the market today alleviating potential further real estate appreciation while they continue to save

Ideal Candidates for the program:

· Individuals/families that may be fresh out of College/University that have excellent earnings potential but minimal capital
· Individuals/families that expect an inheritance or a lump sum of money within the next 5 years


Important information to consider:

· The loan will ultimately NOT increase buying power as lenders will be required to add a cost of borrowing into the debt servicing calculations (loan amount amortized over 20 years at a rate of 4.64)
· This program is in partnership with CMHC/Genworth and Canada Guarantee (applicants will need to pay premiums) even if the down payment is 20%

· If loan is not repaid within the first 5 years, the applicant will begin to repay the government at a rate to be determined by current interest rates

· The loan can be repaid within the first 5 years penalty free at any time

· The government loan will be registered on title as a second mortgage


Process:

· Applicant to visit a qualified lender and submit a pre-approval into their financial institution of their choice
· Once approved, applicant would then take their pre-approval letter and submit off the government office for review (see below for details)

· Documents that need to be sent into the government will include: Proof of residency in Canada and BC, secondary ID, proof of income and tax filings, evidence of pre-approval from their lender

· If approved, the applicant will receive notice of eligibility and a home buyers kit which includes information for the lender, real estate agent and solicitor conducting the transaction


For more Information:

http://housingaction.gov.bc.ca/tile/home-owner-mortgage-and-equity-partnership/





BC loan program Summary