Hey everyone, I know I am a little late to the party on this one but its taken a while to figure out exactly what BC Housing wants when a client submits to them as they are very picky and also the best ways to position this at lenders.
Here is the purpose of the BC Home loan from their website:
“BC Home Owner Mortgage and Equity Partnership (BC HOME Partnership) assists residents of British Columbia who are eligible first-time homebuyers by providing repayable down payment assistance loans.”
What they mean is if you fit their qualifications you can get up to $37,500 in addition to your down payment to purchase your first home.
Here are their qualifications:
- You’re a Canadian citizen or permanent resident for 5 years and have lived in BC for at least one year
- You are a first-time home-buyer
- Your purchase price does not exceed $750,000
- The mortgage must be insured (Total of all down payment funds equals less than 20% of purchase price)
- Total gross household income is $150,000 or less (This is only for whoever is on application)
- This will be your principal residence
- At least half the minimum 5% down payment come from your own funds. Can be gift or savings / RSP. They will match up to a max of $37,500
Here are the major terms of the BC Home Partnership Loan:
- No payments for first 5 years
- 25 year amortization
- Rate for repayment starting year 6 is Prime + 0.5%
- $560 is added to your legal fees for registration of this loan
- Registered as second mortgage on title
- Loan may be paid off anytime penalty free
- If the home ends up not being your principle residence later on you must repay the BC Home Partnership loan or if you make changes to the title such as adding someone else to title.
Those are the major points of interest and guidelines for this BC Home Partnership loan.
My thoughts on this loan are relatively positive but as a mortgage broker I see this as more of a political move then a major help to First Time Homebuyers. The guidelines are quite strict since one of the main problems people have is income qualifying but since they are not allowed a cosigner this loan wouldn’t help the people who can’t afford in this current market. The only way you may have someone else on title is if your spouse who is able to not be a First Time Homebuyer comes on the mortgage to help qualify. They are the only ones allowed by a very small amount of lenders to help income qualify.
One of the bigger positives of this loan is if your household income is higher than $150,000 and you haven’t fully saved up your down payment of 5%, there is still another mortgage program that you can use where income isn’t capped. Not very many lenders have this program anymore but it has way less restrictions than the BC Home Partnership Loan and you are eligible for the best rates these lenders have.
If you are curious about the BC Home Partnership loan and want to know the ins and outs of whether you should consider it or if your income is over $150,000 and you don’t have your 5% saved up yet, give me a shout.