Buying a property is one of the biggest landmarks in anybody’s life. First and foremost, your choice of home establishes the foundations for starting a new and exciting chapter in your life. Not only does it start you off on the right foot, it will also create or augment your greatest financial asset. With the latter factor in mind, starting on the strongest possible platform for your financial investment is essential.
There are many financial elements to consider, and there has never been a better time to start taking the various aspects into account than now. Some of those aspects are potential financial assistance in the forms of grants, better mortgage rates and social programs designed for new homeowners.
When it comes to buying a property, particularly your first, knowledge is power. Apart from providing you with a better understanding of the full costs involved, a good real estate agent will open your eyes to various forms of assistance. As a first-time buyer(s) in Owen Sound or Grey County, the Investment in Affordable Housing homeownership program is easily one of the best forms of assistance that our county has to offer.
The Investment in Affordable Housing Program
Since 2011, the IAH homeownership plan has been used to help residents in the Owen Sound and Grey Bruce regions to make the transition from renting to owning. Through the CMHC, the Government of Canada has been able to increase access to affordable housing for larger portions of the population. This is mainly achieved by removing some of the financial stress linked with saving for a down payment.
With the continuation of support provided by the government authorities, the IAH replaces previous plans like the Affordable Housing Initiative (AHI), which acted as a predecessor to the IAH and ran from 2001 to 2011.
The IAH has been one of the beneficiaries of a $1.9billion commitment spread across eight years and has already helped many Grey County residents through the process of becoming first-time buyers. Most people in the program can receive up to 5% of the property value and under the right circumstances, it could boost your down payment savings too.
Who Governs The Investment In Affordable Housing?
The IAH program is a federally funded policy. However, the Government of Canada allows provinces and territories to control individual scenarios. Subsequently, the guidance for Ontario residents may not be identical to those in Alberta, Quebec, or British Columbia.
Reports on funding, both provincially and nationally, are published annually and can be accessed online. The Ontario program works on the principles of the Long-Term Affordable Housing strategy, and the funding for the program is renewed annually on April 1st.
As a prospective applicant for IAH assistance, however, your focus should be based on your personal accessibility.
How Does The IAH Funding Work?
Down payment assistance through the IAH program is provided to eligible purchases via a loan. Funding for this form of assistance is forgivable after 20 years, which is a huge part of its attraction. Essentially, as long as you abide by the rules of the affordable housing program, you will come out on top through this plan.
Funding for the down payment assistance program is provided at the time of closing on the purchase of the home. This is when the mortgage can be registered on title.
There are conditions for repayment by the homeowner(s), however. Repayment of the original down payment contribution must be made in the following cases:
- A homeowner is in default
- A unit is sold
- The unit is no longer the principal residence of the purchaser before the affordability period ends (20 years)
Who Is It For?
The IAH homeownership program was established primarily with low to moderate income families in mind. There are several conditions (we’ll explain those in more detail later) that are used to decide whether a household qualifies for the program.
As a government funded program, its goal is to aid the economic growth throughout the country. It doesn’t discriminate on age or gender, but does still have key demographics in mind. The aforementioned financial elements are the main focus, however. Generally speaking, the IAH Program has four main aims. They are to;
- Increase the supply of affordable housing across Canada
- Improve and preserve the quality of affordable housing
- Improve housing affordability for vulnerable Canadians
- Foster safe, independent living
The program is open to individual and joint applicants throughout the Grey Bruce area, however rulings and parameters do alter depending on which category your application falls under. But if you are a low to moderate income household that has been renting and is in search of affordable housing, this could be a great form of support.
Am I Eligible For An IAH Loan or Down Payment Assistance?
Before making an application for down payment assistance, you must first decipher whether help is available. You may believe that you fall into the category of low to moderate income, but it has to be proved to the appropriate authorities (such as, the County of Grey).
As with most programs aimed to help first-time buyers in the Grey Bruce area, prospective buyers will need to fill out a formal application. Subsequently, applicants will be assessed on a number of important qualifications. To be eligible for down payment assistance, you must:
- Be a renter of a household in Grey County buying a sole and principal residence in Grey County.
- Have a household income at or below $74,100; income level as determined by the County of Grey.
- Must qualify for a mortgage — Co Signatures not eligible.
- Eligible Unit Types: resale or new homes are eligible unit types. Homes may be detached, semi-detached, town (condo and freehold), stacked homes, row houses, apartments or similar built forms and duplexes. Mobile homes/trailers are not eligible.
- Maximum Purchase Price: $224,976. This excludes the Town of Blue Mountains area, where maximum prices are $261,600.
If you satisfy the above criteria, there’s a strong chance that you will be eligible for IAH assistance.
What If I/We Don’t Qualify?
Failing to meet the above requirements for IAH support can feel like a major blow in your bid to buy a property. However, it doesn’t mean that the dream of homeownership has to fade and deteriorate. With a little additional research, you may be able to source alternative sources of support.
There are many other policies available for prospective Grey Bruce homeowners. Some of which are:
The 5% Down Payment Program
As the name says, this gives prospective homeowners a chance to buy their property without dedicating years to saving a huge deposit. This program was originally designed exclusively with first-time buyers in mind, but has since been opened out to everyone.
The Home Buyers’ Plan (HBP)
This government program essentially allows first-time buyers to withdraw $20,000 of tax-free money ($40,000 for couples). It is open to residents throughout Canada who haven’t previously participated in the plan.
The Cash Back Program
It isn’t only open to first-time buyers, but the cash back program can be very useful indeed. With potential returns of up to 3% on the mortgage price, those funds can be used to clear the various fees that an inexperienced buyer may overlook.
The City of Owen Sound Mortgage Assistance Program
An alternative to the IAH, this program is still aimed at low to moderate income households. It allows applicants to claim up to $58,000 to be used as part of their down payment. Essentially, it works as a low-interest loan, which buyers pay back (with a 1% interest rate) over 30 years.
The opportunities aren’t limited to these programs alone. Navigating the waters of home ownership with assisted funding can be confusing. If you would like further assistance through the process, Contact me today and I’ll be more than happy to help. There is no better time to invest in real estate than today.
Do I Need To Know Anything Else?
In truth, the factors relating to eligibility and funding should provide enough guidance during the process. Nonetheless, even with it being a government assisted loan, the IAH program is still technically a loan. As such, you must appreciate the full scenario.
Once you’ve gained support with your down payment, you may assume that this is the end of the process. However, you will be required to keep the local authorities informed with respect to your ongoing situation. Should your situation suddenly encounter a dramatic change, you may be required to repay the down payment loan in full. As long as there is no purposeful misleading on your behalf, though, there’s nothing to fear.
Nevertheless, you should be aware that several factors could alter your situation, and in turn your loan. This could range anywhere from meeting a new partner to gaining a new job. If the household income is bumped up beyond the stipulated limits, things could change. The main issue, though, regards whether it remains your primary residence. Should you decide to turn the property into a commercial venture, your previous support could become void.
Ultimately, those continued rulings are in place to stop the government and authorities to falling victim. If you are a genuine first-time buyer in need of support for affordable housing in Grey County or Owen Sound, the IAH could be the answer.
If you believe that you are eligible for the IAH Homeownership Program, or would like to learn more about the potential of assisted financing, our friendly and experienced team of advisors is ready to help.
In addition to confirming eligibility, I will guide you throughout the process. This is to ensure that you gain maximum assistance for the down payment on your first property. For more information contact Grey County Housing at 519 376-5744 or use the form on my Contact Page to get in touch with me today.
With my support, your dreams of finally becoming a homeowner are closer than ever.