BC HOME Partnership Program

Darcy DoyleMarket Update

The Mortgage Professionals-Couple holding house keys

On January 16th 2017 the BC provincial government rolled out its latest Housing Action initiative called  BC HOME Partnership Program.  This partnership is provided strictly for First Time Home Buyers ,it will assist them by providing a loan for a portion of the required down payment when buying their first home.

This government-backed loan, will simply match the down payment amount of any first-time homebuyer(s) equaling up to a maximum of 5% of the purchase price or $37,500. The total down payment including the BC HOME loan cannot exceed 20% of the purchase price.

This loan, will be interest-free for the first 5 years, but becomes payable in year 6 of the mortgage. This 25-year loan will be registered as a second mortgage on the title, and will have an interest rate of Prime + .05% = 3.2% (Prime Rate is currently 2.7%).

To give you an indication of what the payment for this loan would be in addition to your mortgage payment, I will use two examples; a 2.5% loan and a 5% loan on a $475,000 purchase (Maximum purchase price to be eligible for the full First Time Home Buyers Grant)

Example 1

475,000 x 2.5% = $11,875 loan
$11,875 @ 3.2% interest rate over 20 years = $69.34
Monthly loan payment is $69.34

Example 2

$475,000 x 5% = $23,750 loan
$23,750 @ 3.2% interest rate over 20 years = $138.67
Monthly loan payment is $138.67/mo

Who is Eligible For The BC HOME loan?

  • Applicant(s) must use the property as their principal residence
  • Applicant(s) must have at least half half of the minimum down payment required.
  • Applicant(s) must be a Canadian citizen or a permanent resident for at least five years.
  • Applicant(s) must have lived in BC for the last 12 months.
  • Applicant(s) must be a first-time homebuyer who has not owned and interest in a principal residence anywhere in the world at any time.
  • Applicant(s) combined gross income cannot exceed $150,000
  • Purchase price may not exceed $750,000

This program comes at a time when many first-time home buyers are struggling to save enough money to enter the housing market due to increasing prices. This program targets those first time home buyers that require that extra bit of help putting the required down payment funds together. What potential applicants need to consider, is that the insurance premium added to the total mortgage amount will be increased to reflect that of Non Traditional or borrowed down payment type. This premium is slightly higher than the traditional or saved down payment type and will further increase the amount borrowed.

Insurance Premium Table:

As always, feel free to contact us if you have questions about the BC HOME Partnership program or would like to know how to apply for your upcoming purhcase. We will be glad to help you with the process.

Darcy Doyle – Senior Mortgage Professional
604 889 7343