The First Time Home Buyers Incentive officially came into effect last week and will start providing interest-free shared-equity loans to interested buyers in the form of down payment assistance.
To recap how the program works, participants must put down at least 5% of the home’s value with their own money, while the government (through the Canada Mortgage and Housing Corporation) would contribute an additional 5% of the down payment if the purchase is an existing home, or 10% if it is a new build.
The buyers don’t need to make any monthly payments, though the loan must be repaid after 25 years or when the home is sold.
CMHC also shares proportionately in any future gains or losses in home value. ie. they put in 5% now, they get 5% of whatever the value is when the loan is being repaid.