An aerial view of houses in East Vancouver near the Pacific National Exhibition fairgrounds. The first-time homebuyer incentive has been discontinued by the Canada Mortgage and Housing Corporation, the federal agency announced on Thursday. (Gian Paolo Mendoza/CBC)
The Canada Mortgage and Housing Corporation (CMHC) revealed on Thursday the discontinuation of the first-time homebuyer incentive, an initiative launched in 2019 to alleviate monthly mortgage payments for novice homebuyers by having the government undertake partial ownership of properties.
According to the CMHC's website, the cutoff for new or resubmitted applications to the program is midnight ET on March 21, 2024. Under the plan, the government offered a loan of up to 10 percent of the purchase price to bolster the down payment, thereby diminishing monthly payments. However, homeowners must repay the incentive after 25 years or upon the property's sale, with the owed amount adjusted based on the property's fluctuating value.
Apoorva Pande, a prospective first-time homebuyer in Toronto, expressed disappointment over his ineligibility due to surpassing the maximum allowable combined income of $150,000 with his wife. The couple has been searching for a house for two years, facing a chronic scarcity of available properties, which has resulted in bidding wars and inflated prices.
Leah Zlatkin, a mortgage broker in Toronto, noted a high interest among young Canadians in the program but highlighted stringent eligibility criteria, including income and savings prerequisites, which limited the pool of eligible applicants. She stated that only two of her clients qualified during the program's duration, with others deterred by the prospect of entering into a co-ownership arrangement with the government.
While Zlatkin acknowledged the program's potential, she criticized its administrative complexity, emphasizing that the cost of administration outweighed the number of successful applicants. She questioned the program's viability given its low utilization rate, suggesting it may not warrant continuation.
