{"id":18310,"date":"2021-05-10T16:22:31","date_gmt":"2021-05-10T20:22:31","guid":{"rendered":"https:\/\/www.zoocasa.com\/blog\/?p=18310"},"modified":"2021-05-10T16:22:33","modified_gmt":"2021-05-10T20:22:33","slug":"first-time-buyer-incentive-eligibility-increase","status":"publish","type":"post","link":"https:\/\/www.zoocasa.com\/blog\/first-time-buyer-incentive-eligibility-increase\/","title":{"rendered":"New Updates to the First Time Home Buyer Incentive Targets Toronto, Vancouver, and Victoria"},"content":{"rendered":"\n

Last week, the federal government announced that the eligibility criteria for the First Time Home Buyer Incentive (FTHBI) will be expanded immediately in key cities, Toronto, Vancouver, and Victoria, to account for their high purchase price.

Under this new incentive, buyers in qualifying markets are now eligible for an increased qualifying annual income of $150,000 and an increased total borrowing amount of four and a half times their qualifying income.<\/p>\n\n\n\n

What is the First Time Home Buyer Incentive <\/h2>\n\n\n\n

First introduced in 2019, the FTHBI is designed to alleviate mortgage costs for first-time home buyers, reducing monthly payments by providing shared equity loans of 5% toward the down payment of a resale home, and 5% or 10% for newly-built homes. By boosting the size of buyers\u2019 down payments, the FTHBI whittles down monthly mortgage costs, offering some relief on the costs of homeownership.

Previously, to qualify for the incentive, the combined household income for the buyers could not exceed $120,000 and the Mortgage-to-Income Ratio could not exceed four times their annual income. This capped the maximum purchase price eligible for this program with a minimum 5% down payment to $505,000.

This incentive provided relief in 19 out of 25 of Canada\u2019s largest urban centres <\/a>upon its introduction, but did little to support buyers in the country\u2019s most expensive markets. Upon its announcement, only 13 neighbourhoods in Toronto<\/a> had average condo prices low enough to qualify with the minimum down payment, and no neighbourhoods in metro Vancouver.<\/a> The gap between average purchase prices and the maximum mortgage amount for the incentive rendered the program nearly unusable in Canada\u2019s most expensive cities – even for buyers looking to purchase the most affordable housing types.<\/p>\n\n\n\n

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Changes To The First Time Home Buyer Incentive Address Canada\u2019s Most Expensive Markets<\/h2>\n\n\n\n

As a result of last week\u2019s change to the incentive, the maximum qualifying income and morgatable amount has been increased for buyers purchasing a home in the Toronto, Vancouver, and Victoria areas.

“The First-Time Home Buyer Incentive is the part of the National Housing Strategy that helps Canadians access homeownership,\u201d comments Adam Vaughan, Parliamentary Secretary to the Minister of Families, Children and Social Development and Minister responsible for Canada Mortgage and Housing Corporation.<\/p>\n\n\n\n

\u201cOur government recognizes that making the choice to own for the first time is a challenge, especially in major markets where housing costs are rising fastest. To that end, the new enhancements under the Incentive increases the eligibility of the programme in Toronto, Vancouver and Victoria to now allow purchases of up to $722,000. This will give new homeowners greater access to housing options that meet their needs.” <\/p>\n\n\n\n

Today\u2019s expanded incentive program better reflects the average price for a condo in each region, which in April 2021 was $727,137<\/a> in Toronto, $729,600<\/a> in Vancouver, and $547,600<\/a> in Victoria. Under the new program, which has a maximum home price with minimum down payment of $722,000, there is a better opportunity for first-time buyers in these markets to take advantage of the incentive. <\/p>\n\n\n\n

Which Areas Are Included in the Expansion? <\/h2>\n\n\n\n


The federal government has extended the program in the Toronto, Vancouver, and Victoria Census Metropolitan Areas, which includes both the major cities and their surrounding areas.

In Toronto Region this includes the cities of: <\/p>\n\n\n\n