BC Home Partnership

BC First Time Buyer Loan Program to End by March 31, 2018

Steve Saretsky -

When the BC Government announced their 30 point plan to address housing affordability, they quietly noted they would be phasing out the BC Home partnership program. It appears the move to quash the program is happening much quicker than anticipated.

Per the BC Housing website, the program will no longer be accepting applications after March 31, 2018.

Home Partnership program ending
BC Government to end Home Partnership Program

A rather dull ending for the controversial program. The lending scheme was first introduced by the BC Liberal Government at the start of last year and pledged to match the downpayment of struggling first time buyers. First timers who couldn’t save enough for a downpayment would have their downpayment matched by the BC Government up to a maximum of 5% or a sum of $37,500. The loan was interest and payment free for the first five years, and registered on title as a second mortgage. 

While the program may have been well intentioned, the lending scheme ultimately encouraged first time buyers to purchase on nearly 100% leverage during a frothy a housing market. Yes, the BC Government was essentially involving itself in the subprime lending business using tax payer money.

As a result, the program received considerable backlash during a time when financial regulators were trying to curb excessive borrowing and household indebtedness.

The BC Government initially requested CMHC to waive insurance premiums for the Home partnership program, to which CMHC’s Evan Siddall responded “Given our published concerns about house price values in Vancouver, BC would not be at the front of the line as a candidate for an exception.” Further stating, “I would therefore urge you to reconsider policies that lure the most vulnerable Canadians into increasing their exposure to the Vancouver housing market.”

Despite moving ahead with the program anyways,  the lucrative offer from the BC Government was mostly a bust. The program was extremely difficult to qualify for and CMHC insurance premiums reduced any potential benefit. During the 9 months the program has been active, only 1,395 applicants have been approved and or paid out.

Government analysis determined that “the program was helpful to many homebuyers, but not popular enough to cause a significant impact on market conditions, given the program timing coincided with already constrained supply conditions.”

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