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The B.C. government introduced a new program today aimed at assisting first-time home buyers by offering to help cover the cost of a mortgage down payment with an interest-free loan.
The Home Owner Mortgage and Equity Partnership program will provide a maximum loan of $37,500, or up to five per cent of the homes purchase price, with a 25-year loan that is interest-free and payment-free for the first five years.
The program is meant to help younger British Columbians get into the housing market.
In June 2016, Premier Christy Clark announced that it was time to take “bold action” on the issue of housing affordability in response to Vancouver’s housing crisis.
"We believe every British Columbian deserves a place to call home," said Premier Christy Clark.
“To make it easier for someone who hasn’t built up any equity yet to get into the housing market.”
So what does this mean first-time buyers in Kelowna?
The average price of a house in the Okanagan is substantially less than average housing prices in Vancouver, but factors like employment and average salary still make purchasing a house difficult for first time buyers in the Okanagan.
“The average demographic for the fist-time home buyer is about 26-36 years of age, dual income professionals working in the city,” said Century 21 realtor Luke Cook.
"Kelowna is the entrepreneurial capital of Canada, so having an interest free loan for a first time buyer would be an advantage,” said Cook "because realtors deal with a lot of business owners looking to buy properties for the first time and it's a struggle.”
In order to be eligible for the loan, first-time buyers must first be approved for an insured high-ratio first mortgage (mortgage down payment is less than 20% of the home price). On completion of the sale, program funds will be advanced and the loan will be registered as a second mortgage on the property's title.
The B.C. Home Owner Mortgage and Equity Partnership program will start accepting applications Jan. 16, 2017.
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