News Update: CMHC To End First-Time Homebuyer Incentive Program

by Gerald Lawrence

IMPORTANT – February 29, 2024

The First-Time Home Buyer Incentive has been discontinued.

The deadline for new or updated submissions for the First-Time Home Buyer Incentive is midnight ET on March 21, 2024.

For new and resubmitted First-Time Home Buyer Incentive applications

All new applications and resubmissions for previously cancelled or declined applications must reach the Program Administrator by March 21, 2024 (midnight ET).

In cases where an application was previously cancelled or declined, it must be resubmitted and received by the Program Administrator before the March 21, 2024 (midnight ET) deadline.
If an application is submitted on or before the March 21, 2024, deadline (midnight ET) and is declined due to an application error, the mortgage loan insurer is responsible for rectifying the issue and resubmitting the application.
Applications resubmitted after March 21, 2024 must undergo a manual review. Requests for such reviews must be submitted no later than March 25, 2024 (midnight ET).

The Program Administrator will process applications received before the deadlines promptly. No new approvals will be granted after March 31, 2024.

For approved applications

The Program Administrator will continue to consider post-approval changes, following the guidance outlined in the Operational Policy Manual (PDF) available on the Place to Call Home website (refer to section 6.3).

For inquiries: FTHBIOps@cmhc-schl.gc.ca

About the Program

The First-Time Home Buyer Incentive helps qualified first-time homebuyers reduce their monthly mortgage payments without adding to their financial burdens.

The First-Time Home Buyer Incentive is a shared-equity mortgage with the Government of Canada, which offers:

5% or 10% for a first-time buyer’s purchase of a newly constructed home
5% for a first-time buyer’s purchase of a resale (existing) home
5% for a first-time buyer’s purchase of a new or resale mobile/manufactured home

The shared equity component of the incentive means that the government shares in both the upside and downside of the property value, up to a maximum gain or loss equal to 8% per annum (not compounded) on the Incentive amount from the date of advance to the time of repayment.

By obtaining the Incentive, the borrower may not have to save as much of a down payment to be able to afford the payments associated with the mortgage. The effect of the larger down payment is a smaller mortgage, and, ultimately, lower monthly costs.

The homebuyer will have to repay the Incentive based on the market value of the home at the time of repayment equal to the percentage (for example, 5% or 10%) of the original home value used to determine the Incentive, up to a maximum repayment amount equal to:

(i) where the home’s value has appreciated, the Incentive plus a maximum gain of 8% per annum (not compounded) on the Incentive amount from the date of advance to the time of repayment; or

(ii) where the home’s value has depreciated, the Incentive minus a maximum loss of 8% per annum (not compounded) on the Incentive amount from the date of advance to the time of repayment.

The homebuyer must repay the Incentive after 25 years, or when the property is sold, whichever comes first. The homebuyer can also repay the Incentive in full any time before, without a pre-payment penalty.