{"id":1728,"date":"2020-02-15T14:27:22","date_gmt":"2020-02-15T19:27:22","guid":{"rendered":"https:\/\/terrygetsmortgages.ca\/?p=1728"},"modified":"2020-02-15T14:27:22","modified_gmt":"2020-02-15T19:27:22","slug":"cmhcs-fthb-incentive-off-to-a-slow-start","status":"publish","type":"post","link":"https:\/\/terrygetsmortgages.ca\/cmhcs-fthb-incentive-off-to-a-slow-start\/","title":{"rendered":"CMHC\u2019s FTHB Incentive Off to a Slow Start"},"content":{"rendered":"<p><img decoding=\"async\" class=\"alignnone wp-image-1738 alignright\" src=\"https:\/\/terrygetsmortgages.ca\/wp-content\/uploads\/2020\/02\/First-time-home-buyers-pic-300x213.jpg\" alt=\"\" width=\"411\" height=\"292\" \/>As reported recently by Canadian Mortgage Trends, the voice of Canadian Mortgage Professionals, CMHC\u2019s First-Time Home Buyer Incentive (FTHBI) is off to a slow start. The initiative had been widely criticized at its inception as nothing more than a cynical election ploy, and recent results seem to confirm that cynicism. \u00a0Just four months after its official launch, according to the report, CMHC\u2019s First-Time Home Buyer Incentive had funded just <strong><em><u>4% of its three-year goal<\/u><\/em><\/strong>, according to new data provided by the agency.<\/p>\n<p>From the time the down payment assistance program launched on Sept. 2 to Dec. 9, CMHC received just 3,252 applications from across Canada, 2,730 of which were approved. That translated into total funding of $51.3 million\u2014<strong><em><u>well off pace of the agency\u2019s three-year target of $1.25 billion.<\/u><\/em><\/strong><\/p>\n<p>Under the program, the government will provide first-time buyers with an interest-free down payment loan of up to 5% for resale purchases, and 10% if the property is a new build. The CMHC then participates in any rise or fall in value of the home, and the loan must be repaid either when the house is sold or within 25 years.<\/p>\n<p>Interest in the program was highest in Quebec, where 1,300 applications were received. Comparatively, just 436 Ontarians applied, according to statistics that were tabled in Parliament last week.\u00a0Following is a breakdown of applications from some of the major housing markets across the country:<\/p>\n<ul>\n<li>Greater Toronto Area:\u00a0 148<\/li>\n<li>Vancouver: 45<\/li>\n<li>Edmonton: 447<\/li>\n<li>Calgary: 260<\/li>\n<li>Winnipeg: 144<\/li>\n<li>Montreal 654<\/li>\n<li>Halifax: 64<\/li>\n<li>New Brunswick: 60<\/li>\n<li>PEI: 12<\/li>\n<\/ul>\n<h4><strong>CMHC head Evan Siddall defended the results via Twitter on Friday:<\/strong><\/h4>\n<p>\u201cIn addition to CMHC\u2019s challenges in estimating demand for the FTHBI, uneven lender support is a complicating factor,\u201d he tweeted on Friday. \u201cIt may also be evidence that there is less unsatisfied FTHBI demand due to the stress test than people claim. People can always buy less expensive homes.<\/p>\n<h4 style=\"text-align: left;\"><strong>Why is the FTHBI Unpopular?<\/strong><\/h4>\n<p>Since the initiative was first announced in the Liberals\u2019 spring budget, many in the industry have criticized it for being overly complicated and promising negligible benefits.<br \/>\nOne of the biggest restrictions of the program is that it\u2019s currently limited to purchases of up to $565,000. In markets like Toronto and Vancouver, buyers can be hard-pressed to find available properties under that threshold. According to recent data from the Toronto Real Estate Board, the average sale price in December was $837,788.<\/p>\n<p>As recently as this past month, I had a young couple expressing interest in the FTHBI. However, after running the numbers, it seemed they were better off NOT using the incentive programme, here\u2019s why:<br \/>\nMy clients have a combined household income of $90,000 and have saved up $25,000 as a down payment. Under the FTHBI rules, they would be restricted to a cap of 4 x $90,000, or a maximum property value of $360,000. Whereas, with their $25,000 down payment representing 5%, this would mean eligibility for a property up to $500,000, (dependent, of course, on lender approval). So clearly the FTHBI would be of no value.<\/p>\n<p>Many buyers have also expressed unease at the thought of giving up equity in their home, particularly with prices rising rapidly in many markets across the country.<br \/>\nWhile Prime Minister Justin Trudeau promised tweaks to the FTHBI during last year\u2019s federal election, no additional updates have since been provided. The proposed changes would increase the maximum purchase price eligible under the program to $789,000 for buyers in Toronto, Vancouver and Victoria.<\/p>\n<p>It remains to be seen whether the FTHBI\u2019s slow start is a harbinger of future demand over the coming years, or whether first-time buyers will grow more receptive to sharing a chunk of their home equity with the government.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>As reported recently by Canadian Mortgage Trends, the voice of Canadian Mortgage Professionals, CMHC\u2019s First-Time Home Buyer Incentive (FTHBI) is off to a slow start. The initiative had been widely criticized at its inception as nothing more than a cynical election ploy, and recent results seem to confirm that cynicism. \u00a0Just four months after its [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":1738,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","om_disable_all_campaigns":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_uf_show_specific_survey":0,"_uf_disable_surveys":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-1728","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-articles"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/terrygetsmortgages.ca\/wp-json\/wp\/v2\/posts\/1728","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/terrygetsmortgages.ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/terrygetsmortgages.ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/terrygetsmortgages.ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/terrygetsmortgages.ca\/wp-json\/wp\/v2\/comments?post=1728"}],"version-history":[{"count":0,"href":"https:\/\/terrygetsmortgages.ca\/wp-json\/wp\/v2\/posts\/1728\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/terrygetsmortgages.ca\/wp-json\/wp\/v2\/media\/1738"}],"wp:attachment":[{"href":"https:\/\/terrygetsmortgages.ca\/wp-json\/wp\/v2\/media?parent=1728"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/terrygetsmortgages.ca\/wp-json\/wp\/v2\/categories?post=1728"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/terrygetsmortgages.ca\/wp-json\/wp\/v2\/tags?post=1728"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}