Guide to The First-Time Home Buyer Incentive (FTHBI) by the CMHC

The Canadian government offers several programs to assist first-time homebuyers, including the First-Time Home Buyer Incentive (FTHBI) [1][2]. The FTHBI is a shared-equity mortgage with the Government of Canada that aims to help first-time homebuyers without adding to their financial burdens. Here are some of the benefits of the FTHBI:

1. Reduced monthly mortgage payments: The FTHBI allows qualified first-time homebuyers to borrow 5% or 10% of a home's purchase price from the federal government, which can reduce their monthly mortgage payments[4]. This can make homeownership more affordable and help buyers get into the housing market sooner.

2. No additional monthly payments: Unlike some other government programs, the FTHBI does not require any additional monthly payments[1]. The incentive is repaid when the home is sold or after 25 years, whichever comes first[2].

3. Lower down payment: The FTHBI can be used in combination with a traditional mortgage, which means that buyers can put down a lower down payment and still qualify for a mortgage[1]. This can be especially helpful for buyers who are struggling to save for a down payment.

4. Available for new and existing homes: The FTHBI is available for both new and existing homes, as well as for mobile and manufactured homes[1][2]. This gives buyers more flexibility in their home search and can help them find a home that meets their needs and budget.

5. No income tax implications: The FTHBI is not considered taxable income, which means that buyers will not have to pay income tax on the incentive amount[3]. This can help buyers keep more of their money and reduce their overall financial burden.

6. Increased eligibility: As of September 2023, the FTHBI has increased the qualifying annual income to $150,000 for first-time homebuyers purchasing a home in the Toronto, Vancouver, or Victoria Census Metropolitan Areas[5]. This can make the program more accessible to a wider range of buyers.

In conclusion, the First-Time Home Buyer Incentive is a valuable program that can help first-time homebuyers reduce their monthly mortgage payments and make homeownership more affordable. With the FTHBI, buyers can put down a lower down payment, have no additional monthly payments, and have more flexibility in their home search. The program is not considered taxable income and has increased eligibility in certain areas. If you're a first-time homebuyer in Canada, the FTHBI is definitely worth considering as you navigate the homebuying process.

Citations:

[1] https://www.cmhc-schl.gc.ca/nhs/canada-first-time-home-buyer-incentive

[2] https://www.cmhc-schl.gc.ca/consumers/home-buying/first-time-home-buyer-incentive

[3] https://www.pine.ca/blog/your-guide-to-first-time-home-buyer-incentives-in-canada

[4] https://www.nerdwallet.com/ca/mortgages/what-is-the-first-time-home-buyer-incentive

[5] http://www.placetocallhome.ca/fthbi/first-time-homebuyer-incentive

[6] https://www.legalline.ca/legal-answers/first-time-home-buyer-programs/