First-time Home Buyer? This one is for you: 

Let’s face it, home ownership is not as easy to attain as it once was. Down payments are harder to save for and the cost of living has increased substantially. However, there is good news for Brantford residents!  In partnership with the Government of Canada, the Province of Ontario, the City of Brantford and the County of Brant, the BHOME Program has been developed to provide first-time home buyers with the downpayment support to buy their first property. Seriously, this is a thing. The government will actually give you money, and lots of it.

Let’s get to the details: 

The BHOME program will allow you to purchase a home up to $334,200 (getting tough with prices these days, but there are still lots of homes available in this price range), while the the City of Brantford gifts you a maximum of $16,710 or 5% of the purchase price. There are some strings attached, but none cause any major concerns. I’ll details these below.

Do you meet the eligibility criteria?

✔ Must be 18-years or older.

✔ Must be a first time home buyer.

✔ Do not own or have an interest in other residential properties or owe arrears/damages to another housing program.

✔ Must be currently renting in Brantford or Brant County, and also looking to purchase a home within Brantford or Brant County.

✔  Household income before deductions must be less than $78,900 and assets must not exceed $30,000.

✔  Eligible to obtain a mortgage from a recognized financial institution & demonstrate sustainability.

✔  Have supplied all the necessary documentation to the City of Brantford Housing Department to determine eligibility.

✔  Must pay closing costs (certain criteria apply).

Do you meet the criteria? If so, read on. If you don’t, there are other ways to get into the market. Just reach out to me via text or email

What homes are eligible for the program?

✔ New units including conversions from non residential.

✔ Resale homes, home inspection must be undertaken and paid for by the purchaser.

✔ Purchase price cannot exceed 334,200*.

✔ May be detached, semi-detached, townhome or condo.

✔ Modest in size, relative to community norms.

✔ Home to be purchased in Brantford or Brant County.

✔A home in which the applicant – or any member of the applicant’s family – has an ownership interest is not eligible for purchase.

Alright, so at this point, you’re probably thinking that this is too good to be true. The government couldn’t possibly give away free money without you signing over rights to your first born child, brother, sister, dog, cat.. etc.

Luckily, the terms aren’t quite that severe. If you keep the home for 20 years, the downpayment loan is forgiven, meaning you don’t repay it. It’s rare that most people keep their first home that long. Below is a summary of the most likely scenario:

• Homeowner is required to pay the original down payment loan plus 5% of the realized capital gain.
• An independent appraisal of the property will be completed at the City’s expense.
• A homeowner may agree to voluntarily repay the down payment loan at any time. (Original down payment loan plus 5% of realized capital gain).
• If a purchaser ceases to occupy the unit as the sole and principle residence within 20 years of the date of purchase, it is deemed a sale and the repayment requirements apply.

See? It’s not that bad. The city takes 5% of the capital gain when you sell, plus the downpayment.

Here is some quick math to visualize a potential home purchase:

>>Let’s say you buy a fixer-upper home for $300,000 and the city gives you $15,000 (5%) for the downpayment, your plan is to keep it for 5 years then use the equity you have built to buy another home. 

You estimate that the home might need $30,000 worth of work, which you complete over the next 5 years. Historically, real estate prices increase around 4-5% per year. However in recent years, it’s been much more than that, upward of 8-9%.

Using a conservative rate of 5% for the next 5 years, your home could be worth in the range of $385,000. Not including the value you have added from your $30,000 in renovations. Let’s just say that by renovating, you increased the property value by $50,000. Now, you have netted an extra $20,000 ($50,000 less $30,000) – bringing your home value to over $400,000. 

Now, you have a home worth an estimated $405,000. Your equity could be as follows:

	Value of property	$405,000
	Less:
	Outstanding Mortgage at end of 5 years	$252,069	(Estimated using mortgage calculator)
	Repayment to City of Brantford	$15,000
	Cost to renovate	$30,000
	5% capital gain on sale to City ($75,000 x 5%)	$3,750	($405,000 – $300,000 – $30,000 = $75,000 gain)
	Total Equity:	$119,181

  The power of homeownership is real. So don’t wait to get into the market. 

Ready? Call Alex – Brantford Real Estate Agent  at 519-761-2417 and let me help you buy a home! 

Disclaimers

-The above example is an estimate only, and there may be other fees or costs depending on your specific scenario. – Historically, home prices increase in value – but no one can predict the market going forward.