Six months after the start of a government loan program to help more Islanders buy their first homes, the PEI Real Estate Association. said she hoped for changes.
The association said the program was not working as well as it had hoped. Their concerns relate to the eligibility conditions of household income and the purchase price of the house.
“For people to actually qualify can be quite difficult,” said Greg Lipton, president of the association.
He said there had been a lot of interest in the pilot loan project.
“It worked for some people… I wouldn’t say it’s a total loss,” Lipton said.
The down payment pilot program is designed to help first-time homebuyers with up to five percent of a home’s down payment, up to a maximum loan of $ 11,250.
The program has been designed to run until March 31, 2020 or until the expiration of the $ 1,000,000 budgeted funding, whichever comes first.
Eligibility requirements include being a Canadian citizen and a first-time home buyer. Total household income must be $ 80,000 or less and the cost of the house must not exceed $ 225,000.
‘Hard to find’ properties
Over the past six months, the program has worked, with Mortgage Center mortgage broker Steven Swyer saying he’s seen the same problem happen over and over again.
By the time you take out student loans, car payments, everything in between, there is very little left that could qualify you for a mortgage.– Steven Swyer, Mortgage Center
“You take $ 80,000 – although it sounds like a lot of money, by the time you take out student loans, car payments, everything else, there’s very little left that could qualify you for a mortgage.” , did he declare.
Swyer said he calculated the numbers with people and often families earning $ 80,000 could only claim a $ 120,000 house.
“Properties are getting harder and harder to find for $ 120,000 in rural and central PEI, no matter where you go,” said Swyer.
Finance PEI, which administers the loan program, said in an emailed statement to the CBC that the program was working as intended.
The number of successful loan applicants was slightly lower than expected, but still within the expected range.
The program can be changed if necessary
To date, over $ 600,000 has been allocated to 93 approved applications for the program.
The province said household income was still slightly higher than the median household income in Prince Edward Island in 2016.
It also shows figures from the Canadian Real Estate Association on the average price of homes bought in Prince Edward Island in 2018, which was less than $ 225,000.
Finance PEI said it will continue to monitor the pilot program and that it will be up to the new government to decide whether any changes need to be made.