[URBAN NOTE] “Ontario’s Peel Region ends homebuyer loan program similar to B.C.”
The Globe and Mail‘s Mike Hager notes that Ontario’s Peel Region, including among other municipalities Mississauga, has abandoned the exact sort of homebuyer loan program that British Columbia is set to adopt.
As British Columbia plans to roll out interest-free loans to thousands of people seeking to buy their first home, the Peel Region in Ontario is suspending a similar loan program so it can instead use the resources for much-needed social housing.
Last week, B.C. Premier Christy Clark announced her government would soon start offering interest-free loans to help first-time home buyers with their down payments in a market where skyrocketing real estate has priced many out of owning property in and around Metro Vancouver.
Under the program, the B.C. government will match down payments of up to $37,500 made by first-time buyers purchasing any home priced up to $750,000. These applicants can get only the 25-year loans – which are free of interest for the first five years – if they commit to living in the unit for those initial five years.
Critics panned the move as heaping additional risk on young families while stoking property prices at a time when Ottawa is warning of abnormally high household debt and introducing measures to cool the frothy housing sector.
In Peel, where more than a million people live in the communities of Mississauga, Brampton and Caledon, the regional government says a similar program of loans was successful in helping 681 renting households become owners over the past eight years. Those wanting to buy a property priced up to $330,000 can have a loan of up to $20,000 for a down payment. That debt is forgiven if they make that home their principal residence for the next 20 years.
Beth Storti, the manager who oversees Peel Region’s loan program, said there was not enough funding in recent years to meet demand from aspiring homeowners.
“Last year was a very, very busy year for us,” she said.