Low-income home buyers may qualify for financial assistance

By Bruce McIntyre

If you are a low-to-moderate income earner who is tired of renting a unit and helping to pay off another person's mortgage, the concept of finally owning a home will go from a dream to a reality if you qualify for financial assistance through the Affordable Home Ownership program.

It is a multi-government sponsored program that assist qualified individuals to purchase a home by allowing them to qualify for a forgivable loan. The program, which has proven successful over the last several years, is funded by the Investment in Affordable Housing for Ontario Revolving Loan Fund. For those who might hesitate before seeing if they qualify don’t have time to wait as the program is heavily subscribed with a set amount of money channelled through the Department of Community Services Renfrew County Housing Corporation. 

Although the program began receiving applications on June 6, they are approved in the order that they are received and deemed to meet eligibility criteria, in past years, the program has been closed in less than two months as the maximum number of participants fills up very quickly.

In order to qualify for down payment assistance, the purchaser must be 18 years or older and be a Canadian citizen, landed immigrant or have refugee claimant status. If you currently own a home, you are out of luck as the program is designed to open up the market for first-time buyers only and they need to be a renter within the geographical boundaries of Renfrew County.

The financial threshold targets household income at or below $90,400 gross annual income. Anyone looking to apply needs the most current year Income Tax Assessment for all adult members of the household.

Other required documentation includes a copy of photo identification and birth certificate for all adults included within the purchase and the home they want to purchase cannot exceed a selling price of $331,412, and they must not have any assets in excess of $20,000. 

Most homebuyers are likely aware that the first major step in this process is providing documentation showing mortgage pre-approval from a primary lending institution at time of application.

Some people in the past have scoffed at the notion of a home inspection prior to making an offer. Sadly, some of these individuals who thought they knew what to look for have found themselves forking out tens of thousands of dollars for major repairs that might have been identified long before the problem caused a major financial burden.

This program is designed to assist first-time buyers avoid those costly mistakes by approving an application that states a home inspection was completed by a certified home inspector at buyer’s expense.

In order to assist as many applicants as possible, the maximum amount of a down payment loan will be up to ten percent of the purchase price not exceeding $25,000 and the successful eligible applicants will be responsible for covering all costs associated with finalizing the purchase.

Once an application is approved and the home has technically been purchased, the down payment loan will be registered on title, in the form of a 20-year mortgage and the down payment assistance is interest free for 20 years.

If for some reason the purchaser decides to lease, rent or sell the property, they are required to repay the down payment assistance plus appreciation on the property.  This provision also applies if the home ownership should change because of the death of the homeowner within the 20-year time frame.

For the determined applicants who complete their 20th year of owning the home, they have the option of being released from the down payment assistance mortgage.

All home real estate sales involving a down payment assistance loan is considered by the Canadian Mortgage and Housing Corporation (CMHC) as homeowner equity for the purposes of securing CMHC mortgage insurance.

The most important aspect is ensuring the application is complete because any application received that does not include all supporting documentation will not be considered. Once approved, an individual receives a 30-day conditional commitment letter which can be presented to a financial institution as proof of down payment assistance.

One challenge facing many homebuyers in the Valley is the lack of choice because the housing trend in the area has been the continual reduction of units for sale and people under this program only have 30 days to present an accepted offer to purchase a home or their application is removed from the program.

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