VICTORIA (NEWS 1130) – The province is ending an interest free down payment loan program which was intended to help first time home buyers, in part because not enough people seemed interested in it.
When the BC Liberal government introduced the BC Home Partnership plan, it expected 42,000 people to sign up over three years.
At this point, just three thousand loans have been approved.
Now the NDP government is diverting the cash set aside for that loan program to what it calls a HousingHub aimed at setting up partnerships to build affordable housing.
— Dave White (@1130reporter) March 6, 2018
Tom Davidoff with the Sauder School of Business was critical of the loan program from the moment it was announced, and says people had to tick a lot of boxes in order to qualify.
“To both want to take an insured mortgage, which is costly, qualify for that mortgage, but also not have a very high income and not have a down payment, and not want to buy an expensive property, that just turned out to be a small number of borrowers,” says Davidoff.
Tsur Somerville, also with the Sauder School of Business, suggests the perceived complexity wasn’t necessarily appealing for people getting into the housing market for the first time.
“If you’re really into finance, you can see why it helps you, because it lets you replace one kind of debt with less expensive debt in a short term framework, but I think a lot of people, when they’re buying a home, particularly for the first time, want a little more certainty, a little more clarity, and sort of having different pieces of debt from different people, is kind of more of a headache than I think they really want,” says Somerville.
“It wasn’t about — ‘you couldn’t buy a house, we’re going to help you buy a house,’ it was ‘you can buy a house, now we’re going to make it easier to buy the house you were already going to buy.”
If you’re about to close on a deal and were planning on using this program, don’t fret — you’ve still got until the end of the month to apply for one of these loans before the program is phased out.