New details on the rollout and launch date of the federal government’s new first-time home buyers incentive (FTHBI) program were announced by the Canada Mortgage and Housing Corporation (CMHC) earlier this week.
The program, which was first announced in the federal budget earlier this year, will allow qualified first-time homebuyers to purchase their first home with a reduced monthly mortgage payment, starting on September 2, 2019, with the first closing on November 1, 2019.
The incentive provides an interest-free loan of 5% toward the purchase of a resale home and either 5% or 10% toward the purchase of a brand-new build. To qualify, the property price must be equal to or less than $505,000 and assumes the buyer is putting in a minimum down payment of 5%.
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While the FTHBI alleviates the financial strain on home buyers and improves their overall debt servicing ability, a main criticism for the program is its purchase price cap of $505,000 for resale homes purchased with a minimum down payment, which won’t go far in Toronto where buyers would arguably need the most help.
For this reason, Zoocasa says the FTHBI would be most effective in markets with overall lower prices, such as in the Prairie or eastern Canadian markets.
Yet recent data compiled by Zoocasa found 13 out of the city’s 35 MLS district neighbourhoods would be eligible for home buyers to utilize the incentive. However, options are limited to condos located away from the city core, including North York condos and Etobicoke.
West Hill (Cenntenial Scarborough) takes the top spot, where condos average at $352,389, followed by Malvern (Rouge) at $362,037, and Black Creek (York University Heights) at $373,932.
Here’s a wider look at the Toronto neighbourhoods where the FTHBI could be used to buy a condo.
With files from Kenneth Chan.