Earlier this week, the federal government announced the launch of a new program which will help even more Canadians enjoy affordable home ownership – specifically, by assisting providers of shared equity mortgages.
A $100-million lending fund under the Shared Equity Mortgage Providers (SEMP) program will be aimed at promoting more housing supply and attracting new SEMPs.
Managed by Canada Mortgage and Housing Corporation (CMHC), the program will last five years from July 31, 2019. Qualifying borrowers will be able to enjoy loans from either pre-construction (Stream 1) or shared equity mortgages (Stream 2).
The Stream 1 path will cover pre-construction costs to begin work on new homes that will provide shared equity mortgages to buyers. Meanwhile, Stream 2 will provide loans to SEMPs to ensure shared equity mortgages “provided by the proponent directly to first time home purchasers.”
“Affordable homeownership is a pressing concern for many young Canadians. Access to funding for SEMPs will encourage the new construction needed to address some of the housing supply shortages in Canada while making housing more affordable for Canadians,” according to Jean-Yves Duclos, Minister of Families, Children and Social Development and Minister Responsible for Canada Mortgage and Housing Corporation.
Aside from individuals, eligible applicants include other levels of governments, as well as both non-profit and for-profit organizations.
“As our Government continues to make big investments in building new affordable homes across this country, we also need to find new ways to help more people buy homes today. That’s what this fund is all about - an innovative approach that can take some of the mortgage burden off homeowners, and help more hard-working families find and afford a good place to call home,” Minister of Finance Bill Morneau stated.