CMHC Ending First-Time Home Buyer Program on March 21

A file photo of a sold sign outside a home in Vancouver. The Canadian Press/Jonathan Hayward

Canada’s first-time home buyer incentive program has been discontinued.

The Canada Mortgage and Housing Corporation (CMHC) made the announcement on its website on Feb. 29. It said it will accept submissions for the program until midnight on March 21.

The First-Time Home Buyer Incentive program offered home buyers a shared-equity mortgage with the Canadian government, allowing them to get into the market with lower mortgage payments.

As part of the program, the government would loan up to 10 percent of the property purchase price to buyers, allowing for a larger down payment to be made.

The money was expected to be paid back after 25 years, or after the house was sold. The amount owing would be adjusted if the value of the property changed.

CMHC’s incentive program struggled with eligibility issues, which included limits to household income and how large a mortgage homebuyers could get.

The Epoch Times reached out to CMHC but did not hear back by publication time.

The website says that no new approvals will be granted after March 31.

The news comes after the organization said the country is facing a housing shortage, with no plan to fix it.

CMHC said in a June 2022 report that 3.5 million homes would be needed by 2030 to retain affordability in the market. At the time, it said that the country would be able to add 2.3 million homes by 2030, which would see nearly 19 million units added, which still falls short of the target for retaining affordability.

When testifying before the Senate finance committee on Dec. 5, 2023, CMHC’s CEO Romy Bowers was asked by Sen. Elizabeth Marshall whether there was a plan to solve the shortage.

“No, there is not a plan,” said Ms. Bowers.

She said that more time was needed to finish an assessment, as it’s “very difficult” to determine how many housing units can be built.

“There are many factors that contribute to housing production including things like interest rate trajectories, the availability of skilled labour, local conditions that really impact housing delivery,” said Ms. Bowers.

It’s not the first time that CMHC officials have been questioned about housing affordability in the country.

In October 2023, the vice president of operations for CMHC admitted the federal housing agency must “do better” to improve affordability. The comment came after data revealed that one CMHC initiative led to the construction of just 12 homes in eight years.

Last year saw a 7 percent decline in housing starts, according to CMHC data.

Numbers released on Jan. 16 show that urban areas with populations of 10,000 and over saw a drop in housing starts from 240,590 in 2022 to 223,513 in 2023.

The Canadian Press, Noé Chartier, and William Crooks contributed to this report.