CMHC Discontinued First-Time Homebuyer Incentive
1.5 min read.
Amid growing concerns about Canada's housing market, the Canada Mortgage and Housing Corporation (CMHC) announced the discontinuation of the first-time homebuyer incentive in March 2024 due to criticisms of its ineffectiveness.
Launched in 2019 with a $1.25 billion commitment, the first-time homebuyer incentive aimed to assist first-time buyers by having the government take on partial property ownership. The program offered a loan of 5% to 10% of the purchase price to contribute towards a larger down payment, to reduce monthly payments. Homeowners were required to repay the incentive after 25 years or upon selling the property. Eligibility was limited to borrowers with incomes below $120,000 to $150,000 in Toronto, Vancouver, or Victoria, and they must have a minimum required down payment of 5% to 15% of the property price in cash.
By the end of 2022, CMHC had committed $329 million, representing about 18,500 applications. However, these restrictions related to annual income and cash savings for down payments severely limited the number of eligible Canadian first-time homebuyers for the incentive.
While discontinuing the first-time homebuyer incentive is disappointing, the public remains hopeful for alternative incentives to address the ongoing housing crisis and support prospective homeowners.
Reference
CMHC says first-time homebuyer incentive discontinued. CP24. (2024, March 1). https://www.cp24.com/news/cmhc-says-first-time-homebuyer-incentive-discontinued-1.6791353
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