If you’re living in a rented space, frustrated, and thinking that your goal of homeownership is just a pipe dream, we’ve got some good news for you. I know what you’re thinking…but, Peggy, I don’t have the down payment.
There are a few programs available that can provide down payment assistance.
Here are a few options:
- Homeownership Program – Simcoe County
The Homeownership Program provides Simcoe County renters with a maximum household income of $103,200 with assistance in providing a down payment loan to purchase a home. The program offers a 10% down payment loan (to a maximum of $50,000), which is interest-free and forgivable after 20 years of occupancy. To be eligible, applicants and the home must meet a set of criteria, including a cap on the purchase price of $593,879 (this usually is adjusted in April). Read the complete details in this application form or download the Frequently Asked Questions PDF.
This program has helped over 300 clients in Simcoe County. As of Feb 2023, there is no wait list, so apply today.
- CMHC’s First-Time Home Buyer Incentive
The First-Time Home Buyer Incentive is a shared equity program that provides eligible first-time homebuyers with a loan to help cover the down payment. The loan amount is 5% or 10% of the home’s purchase price, depending on whether the home is new or resale, respectively. The loan is interest-free and must be repaid when the home is sold or after 25 years. Read more here.
- Home Buyers’ Plan
This plan allows first-time home buyers to withdraw up to $35,000 from their RRSPs for use toward a down payment or closing costs on the purchase of a home. People who take advantage of this plan don’t have to start repayments for two years after purchase and have 15 years to pay back what they’ve withdrawn. Conditions apply. To learn more, click here.
- Gifted Down Payment
Otherwise known as “The Bank of Mom and Dad,” a gifted down payment from someone who wants to help you realize your homeownership dream must meet some criteria:
- It must be from immediate family (mom, dad, brother, sister – not your rich uncle, friend or employer)
- The gift-giver must sign a gift letter saying it is a gift, not a loan, and therefore does not require repayment.
- Borrowed Down Payment
It surprises many people to learn that you can borrow a down payment from an unsecured line of credit and use that towards your down payment. The monthly payments on the line of credit must be factored into the overall debt servicing. For example, if you borrow $30,000 from a line of credit, the bank will require a 3% repayment on that line of credit ($900/month). You would need to qualify for this amount plus your mortgage payment to take advantage of this option. Most people using this option are only topping up their down payment.
If you have questions about how you can purchase your first home, call us at 1.705.739.4455, email us at INFO@PEGGYHILL.COM or fill out the form below.