You’ve heard about it since December, but it’s finally real – now BC residents can get a loan to help them buy their first home.
The provincial government has invested more than $700 million in the BC Home Owner Mortgage and Equity (HOME) Partnership, which will provide up to a $37,500 loan to first-time home buyers.
Applications for the program opened on January 16, and will be accepted until March 31, 2020. Many millennials will be excited to use this program since it makes Vancouver’s housing more affordable.
But it isn’t as simple as walking into an office and coming out with a cheque. To help, we’ve compiled a list to help you apply for your first-time home buyers loan.
Find out if you’re eligible
To apply for the BC HOME Partnership loan, you can’t have owned any part of any residence anywhere in the world. It’s also required that you’ve been a Canadian citizen or permanent resident for at least five years.
You also need to have lived in BC for at least a year before applying. You can have more than one person on the title of the home you are buying, but everyone needs to fulfill the eligibility requirements. The combined gross income of everyone on the title must be less than $150,000 a year.
Before applying, you also need pre-approval for a high-ratio insured mortgage. That means at least 80% of the property’s value is mortgaged, and the mortgage is covered by insurance that protects the lenders. You have to get a letter from an approved bank or financial institution confirming you are pre-approved.
If you’re still unsure, you can use BC Housing’s online calculator to find out if you’re eligible.
Save your money
The BC HOME Partnership loan is conditional based on the amount of money you have for a down payment. Your down payment must be equal to or more than the amount you’re applying for. The BC HOME Partnership program will loan a maximum $37,500 or 5% of the home’s purchase price.
If you want to reduce your mortgage payments, you can save more for your down payment – although the program won’t loan you more money. You can have a down payment of up to 15% of the home’s purchase price and still be eligible for the BC HOME Partnership program.
Prepare the paperwork
Applications for the BC HOME Partnership program are done online, but you’ll still need to put together paperwork for you application. This includes:
- Proof of status in Canada – either a Canadian birth certificate, permanent resident card, or certificate of Canadian citizenship
- Proof of residency in BC
- Secondary identification with a photo – either your BC driver’s licence, BC Identification Card, Passport, or secure certificate of Indian Status
- Notice of Assessments from Canada Revenue Agency, or a Proof of Income Statement from the revenue agency
- Letter of pre-approval for an insured first mortgage
These must be submitted electronically, in one of the following file types: PDF, DOC, DOCX, TIFF, JPG, JPEG, GIF, or PNG.
Find the house
Once you’re approved for the loan, you’ll need to find your house. Upon approval, you’ll get a Homebuyer’s Package that outlines the steps you and your mortgage broker need to take to receive the loan.
Because the loan only covers up to 5% of the purchase price, you need to find a home that’s $750,000 or less before taxes. To be eligible, the house has to have a closing date on or after February 15 – and you need to take possession of the home within 30 days of closing and move in within six months.
You’ll also need to have the home as your principal residence for the first five years you own it – and that goes for everyone on the property’s title.