There are few things we enjoy more than working with first-time home buyers. There’s just something about helping a family find the perfect place to put down roots! As part of our responsibility toward first-timers, we stay on top of any policy changes that could impact those who decide to take the plunge. Enter the First Time Home-Buyer Incentive.  

If you’ve never purchased property—and you’re ready to do so now—here’s what you need to know about the recent government plan aimed at buyers like you!

What is the First Time Home-Buyer Incentive?

The First Time Home-Buyer Incentive is a federal government program. First launched in September, it provides interest-free loans to those who qualify. Yes, you heard that right. Interest-free. 

If you meet the criteria, you can borrow 5 per cent of the purchase price of an existing home, and up to 10 per cent of a brand new one. Of course, we’re talking about a loan, which means you’ll have to repay it—either in 25 years, or when you sell your property (whichever comes first). But you won’t have to make any ongoing payments in the meantime.

What’s the catch? Well, if your home’s value increases before you sell it, the government will share in your gains once it’s sold. That’s because your loan will be what’s called a shared-equity mortgage (meaning the lender has a stake in your property). On the flip side, if your home’s worth goes down, you’ll pay the government back less than you borrowed.

Who qualifies?

Wondering if you qualify for the First-Time Home Buyers Incentive? First off, you must not have owned a home for at least four years (though there are some exceptions related to the dissolution of a marriage or common-law partnership). Second, your total household income must be no more than $120,000—before taxes. 

The amount you borrow through the federal plan can’t be more than four times your qualifying income of $120,000. Lastly, you must be able to make a minimum five per cent down payment (20 per cent at maximum). 

Are you eligible for the First Time Home-Buyers Incentive? If so, you should know exactly how it could help you when it comes time to make a purchase. 

What will it mean for Winnipeggers?

Here’s where things get a bit tricky. Given the criteria for the First Time Home-Buyers Incentive, a property purchased through the program can only be worth so much. The mortgage will be capped at four times your income, which means the home you buy will be worth a maximum of about $5000 to $6000. 

In some parts of the country, there simply aren’t very many homes affordable enough to qualify—which was one of the biggest initial criticisms of the program. Fortunately, that $500-$6000 has been bumped up in pricier housing markets (Toronto, Vancouver, and Victoria). While the criteria has remained the same in Winnipeg, it certainly has the potential to help local buyers afford their dream homes! 

Put simply, there’s a lot of affordability in our market. According to recent statistics, more than half of all single-family homes in the city are under $300,000, and that number jumps to 76 per cent for condos. In other words: the First-Time Home Buyers Incentive has the potential to help many Winnipeggers become homeowners.

The bottom line

Still not sure if you qualify for the First Time Home-Buyers Incentive? An experienced local real estate agent can help! Look for a team that knows the local market—and any government programs that could benefit your family. With a bit of forethought and the right guidance, you can set yourself up for home-buying success.

Ready to find the Winnipeg home of your dreams? Reach out to learn about our buying process—and discover what’s on the market!