Buyers would get a discount, which would become a virtual down payment
Townline wants to sell condos in The Strand development in Port Moody, B.C., to buyers who don’t have the cash for a down payment. (Townline)
A B.C. developer wants to sell condos in Metro Vancouver’s red-hot real estate market to first-time buyers without the cash for a down payment, but not everyone is sure it’s a good idea.
“It’s just a different spin on, ‘How do we provide an affordable home ownership option to buyers who otherwise can’t get into the market?'” says Townline vice-president of marketing Chris Colbeck.
The company is proposing that buyers on limited incomes be allowed to purchase a unit in its Port Moody development for eight per cent less than the appraised market value.
The appraisal would be done by an independent third party, allowing the eight per cent to be used as a virtual down payment for a mortgage.
That would mean the bank would be financing 100 per cent of the cost for the buyer, says Colbeck.
The idea has already been approved by B.C. Housing, says Colbeck, and Townline is hoping the Canada Mortgage and Housing Corporation (CMHC) will approve the program as well.
“It’s a partnership we’ve made with B.C. Housing that’s providing us the ability to do this affordability program that hasn’t been done before. They’re the ones that have structured this program,” he says.
Under review by CMHC
Townline’s proposal is still under review, said CMHC spokeswoman Karine LeBlanc.
Normally home buyers are required to put down a minimum of five per cent to qualify for Canada Mortgage and Housing Corporation insurance, and 10 per cent for homes costing more than $500,000. It is protection that banks and other lenders insist on when providing a mortgage worth more than 80 per cent of a home’s value.
…click on the above link to read the rest of the article…
