Aerial views of housing in Calgary. File photo by THE CANADIAN PRESS

Federal Liberals’ plan to help first-time homebuyers to kick in weeks before election

Ottawa to pick up 5% of a mortgage on existing homes for households that earn under $120,000 a year

A new federal program aiming to give homebuyers some help covering their mortgage costs will kick in on Labour Day — weeks before a federal election — with the first payments flowing in early November, just days after voters across Canada go to the polls.

The Liberals unveiled details Monday of the $1.25-billion plan, which will see the government take an equity stake in thousands of homes to ease mortgage costs for qualified buyers.

The rules of the program would allow previous homeowners to qualify under certain conditions, permit the purchase of a building with up to four units, and help with a maximum purchase price of $565,000, based on government calculations.

The program will begin taking applications on Sept. 2, days before what is expected to be the official start of a federal election campaign where the cost of living — including housing affordability — is shaping up as a central issue.

The first payments would flow on Nov. 1, two weeks after election day on Oct. 21.

Government officials said Sept. 2 was the earliest possible start date, while the minister in charge brushed off the suggestion that the governing Liberals hope to use the launch date for partisan gains.

“If we look at what we’ve done since Day 1, housing investments have been key in all four federal budgets since 2016,” Social Development Minister Jean-Yves Duclos said in an interview.

READ MORE: CMHC defends mortgage stress test changes amid calls for loosening rules

“Every one of the federal budgets in those four years has included significant measures around housing affordability and, look, we’ll continue to do so. We’re not going to be stopped because there is an election coming.”

The first-come, first-served program will see federal funds pick up five per cent of a mortgage on existing homes for households that earn under $120,000 a year, on a mortgage of no more than $480,000. The value increases to up to 10 per cent for new homes to spur construction and expand supply to avoid heating housing prices.

There isn’t any interest on the money, but a buyer would have to repay it in full when they sell their house or after 25 years of living in the home. An early repayment carries no penalties.

If the value of the home goes up, so too does the amount of money owed to federal coffers. The opposite will be the case if the value of a home goes down.

Federal officials said there isn’t a specific policy on what to do with any profits — some organizations that already provide these “shared-equity mortgages” use windfalls to expand their offerings — so the extra cash will for now flow back into the government’s general revenue pool.

The officials provided the information during a briefing for reporters on the condition that they not be identified by name.

The government estimates that some 100,000 new buyers could be helped by the program. Depending on the interest for it, the next government could be forced into a decision: increase spending at risk of boosting demand and heating prices, or stand pat and exclude buyers.

Jordan Press, The Canadian Press

Like us on Facebook and follow us on Twitter

Just Posted

Rail group to bring plan to Abbotsford council

Group is calling for plans to run trains on rail line between Chilliwack and Surrey

UPDATE: New Abbotsford ER expansion expected to welcome patients in October 2020

Deadline for construction proposals closes, but construction timeline unknown

Mt. Baker climbers reach summit in memory of Const. John Davidson

Team includes Abbotsford Police members, Davidson’s 3 kids and others

Abbotsford ‘Champ’ bikes with confidence thanks to War Amps

Camden Loewen, 11, receives adaptive device to hold onto handlebar

VIDEO: Young couple found dead in northern B.C. had been shot, police say

Chynna Noelle Deese of the U.S. and Lucas Robertson Fowler of Australia were found along Highway 97

Hazmat incident closes down Lower Mainland street

One person is believed to be dead, police said

VIDEO: Man found dead near B.C. teens’ truck could be linked to a double homicide

RCMP said they are looking for Kam McLeod, 19, and Bryer Schmegelsky, 18, of Port Alberni

Latest plan is to fly trapped fish by helicopter over Big Bar slide

Multi-pronged plan set in motion to freesalmon blocked by landslide in the Fraser River

Family of missing B.C. senior with dementia frustrated with situation, heartened by community support

Nine days since Grace was last seen the question remains: ‘How can an 86-year-old just disappear?’

Unsealed record suggests U.S. man convicted of murdering Vancouver Island couple left DNA on zip tie in 1987

William Talbott is set to be sentenced Wednesday in the murders of Jay Cook and Tanya Van Cuylenborg

Okanagan Air Cadet challenges gender-exclusive haircut policy

Haircut regulation inspires challenge around gender identity

Pride flags stolen from Lower Mainland church

Went missing sometime Friday night, says Maple Ridge reverend

25 new wheelchair-accessible cabins open at Cultus Lake Provincial Park

Maple Bay Campground is now home to 25 new wheelchair friendly cabins, a first for BC Parks

Most Read