Exciting Changes for First Time Home Buyers in 2024

Starting August 1st, 2024, a significant shift is coming for homeowners purchasing newly built properties. The Department of Finance will provide First Time Home Buyers (FTHB) with the valuable option of a 30-year amortization for insured mortgages. This change is set to make home ownership more accessible to those entering the market for the first time.

What Does This Mean for Buyers?

For many individuals and families, purchasing a home is a pivotal milestone, and the new 30-year amortization period can offer greater flexibility and lower monthly payments. MCAP, one of the leading mortgage lenders, will align with this new directive from insurers, ensuring that potential homeowners can take advantage of these terms under specific conditions.

Criteria to Qualify

Homebuyers looking to benefit from this new option must meet the following criteria:

  1. Insured Loans Only: The mortgages must be for loans with a Loan-To-Value (LTV) ratio between 80.01% and 95%.
  2. Submission Timing:
    • New mortgage submissions must be received on or after August 1, 2024.
    • Existing applications may be resubmitted on or after this date, provided that funds have not yet been advanced to the lawyer.
  3. First Time Home Buyer Status: At least one borrower must qualify as a FTHB, which is defined as:
    • Someone who has never purchased a home before; or
    • Someone who has not occupied a home as a principal residence that they or their spouse/common-law partner owned in the last four years; or
    • Someone who is undergoing the fallout of a marriage or common-law partnership breakdown.
  4. Occupancy Requirement: At least one borrower must occupy the purchased property.

Eligible Properties

This new mortgage option will be available for various types of dwellings, including:

  • 1 to 4 Unit Properties: The program applies to homes of all sizes, as long as they are owner-occupied or partially owner-occupied.
  • Newly Built Homes and Condominiums Only: This option specifically targets new constructions, which can benefit builders and homebuyers alike.

Additional Considerations

It’s important to note that there will be an insurer premium applicable—a surcharge of 0.20% will apply to loans with an amortization period greater than 25 years.

Eligible Loan Types:

  • Purchase
  • Purchase Plus Improvement
  • Port/Replacement

Ineligible Loan Types:

  • Small Rental Properties
  • Secondary Home Programs

With the impending changes effective August 1, 2024, aspiring homeowners can look forward to a more favorable financing option that can ease the path to homeownership. This initiative not only supports first-time buyers but also stimulates growth in the housing market. If you’re considering buying a newly constructed home, be sure to keep these new criteria in mind as you plan your journey into homeownership.

Get in touch today to learn more!