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

Funding uncertain, but Agassiz’s Storytime in the Park will go on, organizer says

The literacy program takes place each summer in Agassiz, Harrison and Seabird Island

Hang gliding video gives stunning view of Harrison and Fraser river confluence

Aerial view shows striking difference between two rivers as they meet

Young Chilliwack singer launches career with French classic

Deanne Ratzlaff performs as featured vocalist in La Vie en Rose in Chilliwack, London and Paris

The most h-i-l-a-r-i-o-u-s spelling bee you’ll ever see in Chilliwack

Secondary Characters Musical Theatre hits the stage with The 25th Annual Putnam County Spelling Bee

RCMP use helicopter and police dog to search for suspect on Sts’ailes First Nation

Man known to police fled an allegedly stolen vehicle and firearm on the reserve north of Chilliwack

VIDEO: Agassiz remembers local officer at grave-marking ceremony

Montague White-Fraser had been buried in the Old Cemetery for 92 years without a headstone

BCHL: Alberni Valley Bulldogs have been sold

Victoria company has purchased BCHL team, but will keep it in Port Alberni

“Does Kirby care?” B.C. First Nation’s group using geo-targeted ads in Houston, Texas for justice

The Heiltsuk Tribal Council has called out Kirby Corporation for the Nathan E. Stewart oil spill

Trudeau announces $79M investment for 118 more public transit buses across B.C.

Contributions from municipal to federal level to fund more buses in a bid to cut commutes

B.C. woman wins record $2.1 million on casino slot machine

‘That night was so surreal … I wasn’t able to sleep or eat for the first two days,’ she said

After B.C. dad’s death, Technical Safety BC wants changes to trampoline park rules

Jay Greenwood, 46, did ‘a series of acrobatic manoeuvres prior to a fall that caused serious injury and cardiac arrest’

Cars keyed on BC Ferries after alarms bother dog on board

Delta police arrested one passenger on suspicion of mischief

$900M settlement reached in class action on sexual misconduct in Canadian military

After facing criticism, the government moved to begin settlement proceedings in early 2018

Tax take stays ahead of increased B.C. government spending

Tax revenue $2.1 billion higher than budget in 2018-19

Most Read