More Details Released about First-Time Home Buyer Incentive
The Government has announced new details about their shared equity mortgage program, dubbed the First-Time Home Buyer Incentive, and indicated the program will officially launch on September 2nd. Having a firm launch date will provide much-needed certainty about the federal program. The delay since the announcement in March has caused some prospective home buyers to sit on the sidelines while they wait for more concrete information about the incentive.
Under the program, the government would assist first time home buyers by providing an interest-free loan for up to 10% of the value of their newly constructed homes to be repaid over a period of 25 years or when the home is sold. Buyers must have a household income below $120,000 and the incentive would be capped at $480,000. This represents, for example, a home purchase value of $600,000 with a 20% down payment.
The new details announced this week relate to the repayable amount on the loan if the value of the home increases or decreases. While homeowners will be responsible for paying back any proportional increase in the fair market value of the home, they will not be responsible for the full loan amount if the home decreases in value.