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  • Writer's pictureBrandon Nishi

CMHC to scrap First-Time Home Buyer Incentive


The federal government has recently declared the discontinuation of the First-Time Home Buyer Incentive (FTHBI) program administered by the Canada Mortgage and Housing Corporation (CMHC), effective March 21, 2024. Introduced in 2019, the shared-equity program aimed to assist first-time homebuyers by providing a government contribution of 5% to 10% towards the down payment. However, the program faced criticism for its limited impact, with a participation rate well below initial government estimates.

Originally allocated $1.25 billion over three years to aid 100,000 homebuyers, the program received fewer than 16,000 applications worth approximately $285 million in shared equity mortgages by March 2022. Critics argued that the maximum purchase price of $505,000 was insufficient, particularly in high-priced markets like Toronto, Vancouver, and Victoria. Despite adjustments in 2019, including raising the maximum purchase price to $722,000 for buyers in specific cities, the program failed to gain widespread traction.

CMHC states that the decision to discontinue the FTHBI is in favor of focusing on the First Home Savings Account (FHSA), a registered savings account designed to help first-time buyers save for a home. Over 500,000 Canadians have already opened FHSA accounts since its launch.

Brokers such as myself, have expressed limited surprise at the program's cancellation, citing its minimal impact on addressing the larger affordability crisis. Issues such as the cost-benefit analysis, capped purchase prices, and the rapid rise in home prices over the years contributed to the program's perceived irrelevance.

For those still interested in applying, CMHC continues to accept applications until March 21, 2024. Any final submissions or re-submissions received after this date will undergo a manual review. The discontinuation does not impact previously approved homebuyers. The blog post concludes with a timeline outlining the key milestones in the rise and fall of the FTHBI, emphasizing its inception in 2019, changes in 2020, and the eventual announcement of discontinuation in March 2024.



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