BC HOME loan program cancelled

By Marisa Baratta
March 28, 2018

Prospective homebuyers won’t have HOME to look forward to anymore; the provincial government has announced it is cancelling the BC Home Owner Mortgage and Equity Partnership program due to a low participation rate, and will be using some of the leftover funds to support the new HousingHub.

When the Province launched HOME on Jan. 16, 2017, the intention was to make housing more affordable by providing eligible first-time homebuyers with a loan to put towards their down payment. These loans are interest- and payment-free for the first five years.

HOME was expected to provide 42,000 loans over three years; in reality, fewer than 3,000 loans were approved by Jan. 31, 2018.

“Unfortunately, the economics of the HOME program just didn’t work because of the fees involved with homebuyers’ access to the program,” Bob de Wit, CEO of the Greater Vancouver Home Builders’ Association (GVHBA), told NextHome. “For example, a homebuyer taking a $15,000 second mortgage would need to pay in excess of $1,000 of fees and charges, not to mention having to deal with an onerous (bureaucratic) process.”

Despite HOME’s low participation rate, the need to make housing more affordable still exists. The question is: will the HousingHub be the answer? This new initiative aims to make purchasing or renting a home more affordable for middle-income British Columbians in select communities by forming public-private partnerships to create affordable homes, and by launching a program to help prospective buyers become homeowners and build equity.

“It is unfortunate that more households did not take advantage of the program, as saving for a down payment continues to be a major hurdle for most first-time buyers,” says Cameron McNeill, executive director of MLA Canada, a comprehensive real estate service provider. “This being said, [HOME] did not address the issue of supply in our market, which is the main driver of increased prices, and instead increased purchaser debt.” He adds that HousingHub’s plan to partner with developers is a “step in the right direction.”

Similar to HOME, one of the HousingHub’s mandates is to “establish a new affordable owner-purchased housing program” and to collaborate with the provincial government to clear or reduce unnecessary barriers.

“A better understanding is needed about the type of assistance it will provide for home purchases and building equity, and who can qualify,” says McNeill. “The success of the program will lie within the execution and each municipality’s ability to truly use the program to fast-track developments and work with developers both public and private. [...] We are excited about the conversation and ideally a program that can be implemented for residents to take advantage of.”

While the HousingHub sounds promising, de Wit says it won’t address the needs that were being met by HOME. “The two programs have very different foci. Whereas the HOME program was targeted at families wanting to purchase a home, the HousingHub is (mostly) all about bringing together social housing advocates with funders, developers and builders for the construction of new social housing,” says de Wit. “They are apples and oranges.”

About Marisa Baratta

Marisa Baratta is a NextHome contributor.

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