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The federal government has discontinued the First-Time Home Buyer Incentive, a much-criticized program aimed at improving housing affordability for new buyers that saw muted uptake in major markets.

Canada Mortgage and Housing Corporation (CMHC), the national housing agency, said in a statement on its website that the program was winding up, with no new or updated submissions to be accepted after midnight ET on March 21.

Applications resubmitted after that date will be subject to a manual review, with review requests to be submitted no later than midnight ET on March 25 and no new approvals to be granted after March 31.

Introduced in 2019, the Incentive was aimed at reducing monthly mortgage payments for qualified first-time buyers through a shared-equity scheme. It offered a contribution of 5% or 10% towards the purchase of a newly constructed home, and 5% of the purchase of a resale existing home or new/resale mobile or manufactured home.

Still, that shared-equity component, which meant the government would also benefit from the potential future sale of a home, proved unpopular with buyers, who would have to repay the Incentive either after 25 years or upon sale.

The program faced challenges from the off. In 2020, federal Conservative MPs Tom Kmiec and Stphanie Kusie slammed its cost and low levels of consumer interest, urging CMHC to topdeo the scheme,  after an annual report showed its uptake lagged far below projections.

Mortgage Professionals Canada (MPC) also criticized the Incentive at its 2022 summit, when vice chair Veronica Love said the scheme was “simply failing” with data showing participation in the program was less than a third of what the government had originally envisaged.

Between its launch in September 2019 and the end of March 2021, the program had seen  LESS THAN 10,000 sucessfull applicants across Canada with Edmonton and Calgary accounting for nearly 2,000 of that total.

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Category: Mortgage Tips & Advice (15 posts)

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  • Posted by John C Filice

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Why Borrowers May Choose a Private Mortgage

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  • February 10, 2021 @ 4:02 PM
  • Posted by John C Filice

How to Handle a Mortgage After a Separation or Divorce

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  • September 9, 2020 @ 7:53 PM
  • Posted by John C Filice

Reverse Mortgages – Impact on Heirs

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  • June 10, 2020 @ 4:16 PM
  • Posted by John C Filice

When Is Mortgage Refinancing a Bad Idea?

Property owners refinance their homes and commercial properties all the time. As your credit improves and you have built more equity into the property, it may make fiscal sense to refinance when inter

  • April 22, 2020 @ 4:56 PM
  • Posted by John C Filice

5 Smart Ways to Use a Home Equity Line of Credit

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  • April 8, 2020 @ 3:41 PM
  • Posted by John C Filice

What should you consider when refinancing your mortgage?

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  • February 18, 2020 @ 9:51 PM
  • Posted by John C Filice

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  • February 14, 2019 @ 1:18 PM
  • Posted by John C Filice

The year higher borrowing costs and stricter mortgage rules hit home

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  • February 14, 2019 @ 12:34 PM
  • Posted by John C Filice

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  • December 24, 2018 @ 11:15 AM
  • Posted by John C Filice

How to Improve Your Chances of Being Approved for a Mortgage

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  • November 28, 2018 @ 12:34 PM
  • Posted by John C Filice

The Pros And Cons Of Reverse Mortgages - A Quick Guide

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  • September 27, 2018 @ 10:41 AM
  • Posted by John C Filice

Should You Get a Shorter-Term Mortgage, Make Extra Payments, or Something Else?

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  • November 16, 2016 @ 1:37 PM
  • Posted by John C Filice

4 Strategies That Can Help You Get PreApproved

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  • November 2, 2016 @ 1:37 PM
  • Posted by John C Filice

5 easy ways to be mortgage free sooner!

We all know that paying off a mortgage as early as possible makes good financial sense. You’ll save significant interest costs and free up money for RRSPs and other investments, and changing l