Canada Mortgage and Housing Corporation (CMHC) has announced that the federal government’s first-time home buyer incentive (FTHBI) will be launched on Sept. 2.
The FTHBI will help qualified first-time homebuyers buy their first home as the incentive reduces their monthly mortgage payment without increasing the amount that they need to save for a down payment. Qualified first-time homebuyers are those with annual household incomes of up to $120,000.
For a family buying a $500,000 home, the FTHBI could save them as much as $286 per month, or more than $3,430 per year.
“This will mean more money in the pockets of Canadians and will help up to an estimated 100,000 families across Canada," said Jean-Yves Duclos, minister of Families, Children and Social Development and minister responsible for CMHC.
The FTHBI complements other measures taken in Budget 2019 to help first-time homebuyers with their down payment, such as increased RRSP withdrawal limit from $25,000 to $35,000. The federal government has allocated $1.25 billion over three years (starting this year) for the incentive.
Budget 2019 also previewed the shared equity mortgage provider fund, a five-year, $100-million lending fund to assist providers of shared-equity mortgages in helping eligible Canadians achieve affordable homeownership. The fund will support an alternative homeownership model targeted at first-time homebuyers, help attract new providers of shared-equity mortgages and encourage additional housing supply. It will be launched on July 31 and administered by CMHC.