B.C. government offers down payment loans to first-time homebuyers

VICTORIA — The B.C. government will loan first-time homebuyers some of the cash they need to afford their down payment, Premier Christy Clark announced Thursday.

The program will provide a government-backed loan of up to $37,500, or five per cent, of the purchase price of a home for qualified buyers, starting Jan. 16.

The goal is to match part of a person’s down payment to help them afford to buy their first home, as long as they already qualify for a mortgage under federal rules and the home is worth less than $750,000.

“What we know is for many first-time home buyers qualifying for a mortgage is hard, but getting past that down payment and scraping together the $25,000 or $50,000 you might need to be able to get into your first home is just impossible,” said Clark.

“So we want to be there to help first-time home buyers get over that hump.”

Clark said the move is a way for government to “be a partner in your home” and move renters into home ownership where possible.

The 25-year loan is interest-free for the first five years, and does not require the homeowner to even pay down the principal during those first five years, as long as they keep the home as their principal residence. It will be recorded as a second mortgage on the title of the property.

After the first five years, the province expects monthly payments at the current interest rate, with the loan repaid over the remaining 20 years. Extra payments or full repayment at any time will be allowed, according to the government.

The new down-payment program will cost government an estimated $703 million over three years, and is expected to help 42,000 people, according to government figures.

To be eligible, a homeowner must:

  • Have saved a down payment amount at least equal to the loan amount for which they are applying from government.
  • Have been a Canadian citizen or permanent resident for at least five years.
  • Have lived in B.C. for at least one year prior to the sale.
  • Be a first-time buyer who has not owned an interest in any residential property anywhere in the world at any time.
  • The home must have a purchase price of less than $750,000.
  • The buyer must already be able to qualify for an insured high-ratio first mortgage for at least 80 per cent of the purchase price.
  • The combined gross household income of all people on title must not be more than $150,000.

Provincial officials provided a few examples Thursday of how the program would work.

On a home worth $600,000, federal mortgage rules dictate a person must have a down payment of at least $35,000. If the person has saved only $30,000, the government would provide a matching $30,000 loan, giving the buyer $60,000 for the down payment.

On a home worth $750,000 (the program maximum), the minimum down payment would be $50,000.  If a person had saved a $52,500 down payment, government would provide five per cent of the $750,000, adding $37,500 to the down payment and allowing the buyer to pay almost $90,000 as the down payment. That could save $5,200 on interest payments on the mortgage over five years, say government officials.

Applications for the program will start on Jan. 16, 2017, for purchases that close on or after Feb. 15, 2017. The province said it will be a three-year program.

Government officials told media Thursday they hoped the program would have a very small default rate on the loans, because the owners would be meeting federal mortgage rules and qualifications under federal stress tests.

The premier said she was not concerned the program would raise housing prices.

“Our analysis tells us that it won’t because everybody who is going to be eligible for this program will have to have been accepted for a mortgage already,” said Clark.

The changes for first-time homebuyers are the latest in a series of housing reforms by the Clark government.

The province introduced a 15-per-cent tax on foreign buyers in August, which data suggests has sharply curtailed foreign purchases in the Metro Vancouver real estate market. The tax has done little to lower the price of most detached homes, but the real estate industry expects prices to drop next year.

The government had also offered tax breaks to first-time homebuyers in its February budget. The budget reforms included removing the property transfer tax on newly built homes worth up to $750,000 (a tax savings of up to $13,000), while increasing the property transfer tax to three per cent from two per cent on homes sold for more than $2 million. At that time, the province chose not to change the $475,000 threshold on used homes that allowed first-time homebuyers to also avoid the property transfer tax.

Christy Clark shakes up B.C. real estate industry with no more self governance

B.C.’s real-estate industry has lost its status as a self-regulating entity following a massive governance overhaul announced Wednesday by Premier Christy Clark.

The move comes a day after the release of a damning report by an independent advisory group, which had been tasked with looking into governance issues and shady conduct within Metro Vancouver’s real estate industry.

The group, which was chaired by Carolyn Rogers, B.C.’s superintendent of real estate, offered 28 recommendations, including stiffer penalties for licensee misconduct, greater transparency and governance issues.

Ending self-regulation, however, was not one of those recommendations, suggesting the Clark government is preparing to take determined steps to address Metro Vancouver’s housing affordability crisis.

As part of the new measures announced Wednesday, all decision making and rule setting will be taken over by a strengthened superintendent of real estate, who will report directly to B.C.’s minister of finance.

At present, the superintendent of real estate is also responsible for overseeing all credit unions and pension and mortgage brokering industries. Rogers announced last month that she was going to leave the position at the end of the month.

Clark said the search for a new superintendent is underway.

Additional changes announced Wednesday will see the real estate council reorganized to include a majority of public interest, non-industry members.

Clark also said that government will implement all of the recommendations found within the advisory group’s report, including bringing in stiffer penalties and fines for realtors and brokerages that break the rules.

Premier Clark announces upcoming changes to the public service

Premier Christy Clark announced upcoming changes to key positions in the BC Public Service:

After 27 years of serving the Province, John Dyble, deputy minister to the Premier, cabinet secretary and head of the public service, will retire effective March 24, 2016.

Dyble’s public service career started in Smithers in 1980, as an engineering student on a survey crew.  Nine years later, after working as a consulting engineer in the developing world, Dyble formally joined the BC Public Service. Establishing himself as a leader on major B.C. infrastructure projects, Dyble rose to become deputy minister of transportation and infrastructure. He was deputy minister of health, responsible for developing and delivering government’s health innovation agenda, when appointed deputy minister to Premier Clark in 2011.

During his five-year tenure as lead deputy, Dyble helped manage and deliver key government priorities such as successive balanced budgets, the BC Jobs Plan, Crown corporation reviews and long-term labour agreements. As head of the public service, Dyble has worked to build a strong corporate executive and maintain the BC Public Service as one of Canada’s top employers.

“John’s work, over a remarkable career, has literally spanned and helped to build our province,” said Premier Clark. “I thank John for what he has accomplished for British Columbia, and I am honoured to have had him as my partner in the public service for the past five years. He leaves the BC Public Service in excellent hands.”

Kim Henderson, currently deputy minister of finance and secretary to treasury board, will become deputy minister to the Premier, cabinet secretary and head of the public service effective March 25, 2016.

Henderson joined the BC Public Service in 1996. Before her appointment to the Ministry of Finance, Henderson was deputy minister of corporate initiatives (Office of the Premier) where she provided leadership on numerous cross-ministry files and served as the public service lead for the government’s Core Review initiative. Previously, Henderson served as deputy minister of labour and deputy minister of citizens’ services and open government (now the Ministry of Technology and Citizen Services) leading the development of B.C.’s open government strategy which won the IPAC/Deloitte Public Sector Leadership Award. Henderson holds a master’s degree in public administration from the University of Victoria.

Athana Mentzelopoulos, currently deputy minister of jobs, tourism, and skills training and ministry responsible for labour (JTST), will become deputy minister of finance and secretary to treasury board effective March 25, 2016.

Mentzelopoulos first joined the BC Public Service in 2004, serving as deputy minister responsible for intergovernmental relations, public affairs and board resourcing and development (BRDO) until 2009. After serving as director general of consumer product safety for the government of Canada, she rejoined the BC Public Service in 2011 as deputy minister of strategic priorities (Office of the Premier), followed by deputy minister for government communications and public engagement (including responsibility for intergovernmental relations and BRDO).

Mentzelopoulos was appointed deputy minister of JTST in 2014, responsible for developing government’s economic development policy. She holds a master of arts degree from the University of Victoria.