The federal government has outlined details of a program to help first time home buyers
The CMHC program would provide up to ten percent of the price of a first home if certain conditions are met. Among them:
- income of less than $120,000 a year
- a maximum mortgage of $480,000 after the CMHC contribution (actual purchase price of $565,000 or less)
- agree to pay the money back within 25 years…or if you sell the house
On a home costing $500,000, with the borrower putting up $25,000 and CMHC kicking in the same amount, the borrower would $286 a month in mortgage costs over the life of the loan or $3,430 a year.
In exchange for the help, CMHC would be entitled to any corresponding increase in the value of a home when the buyer eventually sells. Conversely, the Corporation would be on the hook for any share of the loss if the property depreciates.
Applications will be accepted as of September 2 for home sales that will close no earlier than November. 1.