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BC Home Owner Mortgage and Equity Partnership


Blog by Raphael Milczynski | January 17th, 2017


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About the Program
The BC Home Owner Mortgage and Equity Partnership (BC HOME Partnership) assists British Columbia residents who are eligible first time homebuyers by providing repayable down payment assistance loans. The BC HOME Partnership Loan contributes the same amount first time homebuyers have saved for their down payment, providing up to $37,500, or up to 5% of the purchase price, with a 25-year loan that is interest-free and payment-free for the first 5 years. The loan will be registered on your property title as a second mortgage.

Examples:
Home 1
Price: $480,000
Minimum Down Payment Required: $24,000 (5% of $480,000)
Your personal saved Down Payment: $12,000(2.5%)
BC HOME Partnership Loan: $12,000(2.5%)
Total Down Payment towards your new home: $24,000(5%)

Home 2
Price: $600,000
Minimum Down Payment required: $35,000 (5% of $600,000)
Your personal saved Down Payment: $30,000(5%)
BC HOME Partnership loan: $30,000(5%)
Total Down Payment towards your new home: $60,000(10%)

Home 3 
Price: $750,000
Minimum Down Payment required: $50,000 (5% of $750,000)
Your personal saved Down Payment: $52,500 (7%)
BC HOME Partnership Loan: $37,500 (5%)
Total Down Payment towards your new home: $90,000 (12%)

What are the benefits of the program?
This loan is used to provide financial support to help first time homebuyers enter the housing market, as the first 5 years are no-interest and no-payment. Making it more affordable for first time homebuyers to get into the housing market.

When will the program be implemented?
The program starts on January 16,2017, for purchases of homes that close on or after February 15,2017

To qualify for the program, anyone on title must meet the following criteria:
1. Be a Canadian citizen or Permanent Resident for the last 5 years
2. Have lived in BC for at least the full 12 months preceding your application.
3. Be a first time homebuyer who has not owned an interest in a
principal residence anywhere in the world
 at any time and has
never received a first time homebuyers' exemption or refund.
4. Purchase a home that is $750,000 or less.
5. Be eligible for a high-ratio insured first mortgage for the home
6. The combined, gross annual household income of all individuals on the title
must not exceed $150,000.
7. The home purchase must be the principle residence of all
individuals on the title for the 5 years after purchasing.

What will I need for my online application:
Proof of Status in Canada and residency in British Columbia
Secondary identification (must include photo)
Proof of Income and Tax Filings
Insured First Mortgage Pre-Approval

Steps for the Application Process:
1. You must have a partial Down Payment that you have saved.
2. Find your home and make an offer Subject to Financing.
3. Apply and receive confirmation of eligibility for the BC HOME Partnership
Program (Note that only fully completed applications with all supporting
documents will be considered)

4. Obtain an Accepted Offer on a home, priced $750,000 or under, and provide
details of the planned Purchase to BC Housing for approval.
5. Get pre-approval for an insured first time homebuyer from a financial
lending institution. Contact your mortgage broker for assistance.
6. Take your BC HOME loan commitment to your financial institution.
7. Get final approval for an insured mortgage from your lender.
8. Purchase your new home and move in!

How will I know that my application is accepted?
You will receive confirmation of pre-approval and a Homebuyer's Package.
The Homebuyer's Package will include:
- Detailed information on the steps you need to take in order to receive the BC
HOME Partnership loan.
- Information for you real estate licensee
- Information for your lender
- Information for your lawyer / notary public
You will then work with your real estate licensee to find a home and make an offer.
Once you have an accepted offer, you will need to provide BC Housing with a copy of the Contract of Purchase and Sale and details on the home you are purchasing.
BC Housing will then provide you with a loan commitment letter to take to your primary lender to finalize financing.

How do I repay this loan?
This loan is interest free and payment free for the first year. You may make additional payments or repay the loan in full at any time with No penalty.
At the beginning of the 6th year, interest will start accruing and the homeowner will begin making principle and interest payments, amortized over the remaining 20 years.

Original article: www.bchousing.org