First-Time Home Buyer Incentive Discontinued…

The Canadian Mortgage and Housing Corporation (CMHC) has announced the discontinuation of the First-Time Home Buyer Incentive (FTHBI) program, a decision set to take effect as of March 21. Launched in 2019, this shared-equity program was designed to assist first-time homebuyers by providing a government contribution of 5% to 10% towards their down payment in exchange for a proportional stake in the future value of the home. However, this program faced various challenges and criticisms regarding its effectiveness, especially in Canada’s larger markets where home prices significantly exceed the maximum purchase price allowed under the FTHBI. The program's participation rate remained far below the government's initial estimates, with less than 16,000 applications received by March 2022 out of the 100,000 homebuyers it aimed to assist. The program's limitations, such as the cap on eligible household income and mortgage size, contributed to its low uptake.

In light of these challenges and a review of federal housing plans, the government has decided to refocus its efforts on other tools like the First Home Savings Account (FHSA), which has seen over 500,000 Canadians participate since its launch. The FHSA is considered a more effective tool for assisting first-time homebuyers. Despite the discontinuation of the FTHBI, CMHC assures that this decision will not affect those who were already approved under the program. The program's end signals a shift in government strategy towards more broadly impactful housing affordability measures.

For individuals still interested in applying for the incentive, all final submissions must be received by the March 21 deadline, with a provision for manual review if re-submissions are required due to application errors, provided they are received by March 25.

This change underscores the importance for first-time buyers to explore other available resources and programs designed to facilitate homeownership. Consulting with mortgage professionals can provide clarity on the current options and strategies that align with individual homebuying goals.

For more detailed information on the discontinuation of the FTHBI program and its implications, you can visit Canadian Mortgage Trends and Global News.