This past Monday, the government shared the details of the new CMHC first time home buyer incentive. The incentive can help home buyers towards the down payment up to 10% of the price of a home.
If certain criteria is met, CMHC can contribute up to 10% of the value of a home. The program will be first time buyers with a household income of less then $120,000.
The buyer will need to have the minimum down payment of 5%.
Learn more: How Much Down Payment Do I Need To Buy a House?
Also, the total of the mortgage including the CMHC portion cannot exceed $480,000.
For a resale home, CMHC can contribute up to 5% of the price and for a new home, up to 10%.
Under this program, CMHC would have access to their share of any increase in value of the home when the buyer sells. However if the value decreases, CMHC would be responsible for covering their share of the loss.
Therefore if you bought for $400,000 and CMHC gave you 5% of the value so if you sold for $500,000, CMHC would receive 5% of the $500,000.
Learn more: CMHC.ca
The bottom line is, the money needs to be paid back. And, it is more of a loan then free money.
The funds must be paid back within 25 years or upon the sale of the home.
Applications will be accepted starting September 2nd. Also, the home must close after November 1st. Contact an Ottawa mortgage broker to learn more about the CMHC First Time Home Buyer Incentive.