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First-time Homebuyers Program (FHP)

NOTE:  The First-time Homebuyer’s Program (FHP) will close effective April 20, 2018. Applications postmarked after that date, will not be accepted as funding has been fully committed.

 

Who is eligible?

  • Applicants must be first-time homebuyers from any region of the province who meet the FHP requirements and have been pre-approved for a mortgage by a recognized financial institution.
  • All mortgagors must be first-time home buyers.
  • The program will assist approximately 100 applicants.
  • The program will provide eligible households with up to five percent of the purchase price of a new or existing home ($2,000 of which will be a grant, the remainder will be a repayable loan), to a maximum purchase price of $250,000 (St. John’s [Census Metro Area] and Labrador; $200,000 in regional centres (Clarenville, Gander, Grand Falls-Windsor, Corner Brook and Stephenville and all communities within a 30 km radius ); $175,000 (in the remainder of the Province [Rural]).
  • The amount of the funding provided will be based on a sliding scale that takes into consideration the applicant’s household income level and the cost of the home being purchased.
  • Applicants are permitted to have a guarantor on their FHP Mortgage.

 

What are the income limits?

  • Applicants must have a total household income of less than $75,000 to qualify for the full funding amount.
  • Total household incomes up to $85,000 are also eligible based on a sliding scale of assistance.

 

How much Assistance can you receive?

  • Funding is based on the maximum 5% of purchase price and is subject to maximum purchase prices established by the program:
    • $250,000 (St. John’s [Census Metro Area] and Labrador;
    • $200,000 in regional centres (Clarenville, Gander, Grand Falls-Windsor, Corner Brook and Stephenville and all communities within a 30 km radius); and
    • $175,000 (in the remainder of the Province [Rural]).
  • For example, in St. John’s and Labrador where housing prices are highest, the maximum funding provided to applicants with a household income of $75,000 will be $12,500, while the maximum funding for applicants in the same regions with a household income of $85,000 will be $7,500.
  • Homeowners with incomes between $75,000 and $85,000 are eligible for assistance, however the amount of assistance they can receive is reduced on a sliding scale as per the chart below:

 

SLIDING SCALE OF ASSISTANCE

INCOME LEVEL

ST. JOHN'S & LABRADOR
Maximum Loan Amount*

REGIONAL CENTRES
Maximum Loan Amount

RURAL NL
Maximum Loan Amount

GRANT AMOUNT

$75,000

$10,500

$8,000

$6,750

$2,000

$76,000

$10,000

$7,500

$6,250

$2,000

$77,000

$9,500

$7,000

$5,750

$2,000

$78,000

$9,000

$6,500

$5,250

$2,000

$79,000

$8,500

$6,000

$4,750

$2,000

$80,000

$8,000

$5,500

$4,250

$2,000

$81,000

$7,500

$5,000

$3,750

$2,000

$82,000

$7,000

$4,500

$3,250

$2,000

$83,000

$6,500

$4,000

$2,750

$2,000

$84,000

$6,000

$3,500

$2,250

$2,000

$85,000

$5,500

$3,000

$1,750

$2,000


* Maximum funding amounts are based on the maximum 5% loan available, subject to maximum purchase prices ($250,000 in St. John's [Census Metropolitan area] and Labrador; $200,000 in the five regional centres of Clarenville, Gander, Grand Falls-Windsor, Corner Brook and Stephenville and all communities within a 30km radius; and $175,000 in the rest of Newfoundland and Labrador [Rural]).

 

Is there any flexibility with the Program regarding maximum purchase price?

  • Yes, the FHP also includes a Variance Policy to allow, upon approval, the purchase of homes at prices of up to ten per cent above established maximums within the policy for St. John's CMA, Labrador and regional centres.
  • However, the maximum assistance available to clients who purchase homes within the Variance Policy is capped at 5% of the maximum purchase price for their region. Clients will be responsible for providing any funding above this assistance that is required to meet the 5% requirement for a downpayment. (See “Examples”)

 

What are the First-time Homebuyers Program interest rates?

  • Interest rates will vary, depending on when the client decides to start repaying the downpayment loan; however, it will not exceed the prime lending rate minus one percent.

 

What else should you know about a FHP Loan?

  • The provision of assistance to first-time moderate income home buyers will be in the form of repayable loans which NLHC will finance and a $2,000 grant.
  • Successful applicants would not be required to begin paying back the repayable loan portion for five years after the purchase of a home; the most an applicant would repay in any given month would be just over $100.
  • Clients may choose to begin loan repayment earlier if they have the financial ability.
  • FHP loans are not applicable to homes that have already been purchased.

 

What does the educational component cover?

  • The educational component entails learning opportunities on financial planning; debt management and home maintenance and upkeep. These materials will help ensure applicants have every opportunity to become successful homeowners.

 

Can I select my own lender?

  • Yes, as long as the lender is an accredited lender with competitive mortgage interest rates, and is willing to accept the downpayment loan as an eligible downpayment source.

 

Examples

EXAMPLE 1
Within Established Income Level and Established Home Value
(Rural):
Applicant Income = $47,000
Home to be purchased: $130,000 home in the community of Wesleyville
Required down payment: $6,500 (5% of purchase price of $130,000)
Loan Amount = $4,500, Grant Amount = $2,000 (5% of purchase price of $130,000)
Additional funds required = $0

EXAMPLE 2
Within Established Income Level, Home Above Maximum Purchase Price
(St. John’s Metro):
Applicant Income = $60,000
Home to be purchased: $275,000 home in the city of Mount Pearl
Required down payment: $13,750 (5% of $275,000)
Loan Amount = $10,500, Grant Amount = $2,000 (5% of maximum purchase price of $250,000)
Additional funds required = $1,250.

EXAMPLE 3
Exceeds Established Income Level, Home Above Maximum Purchase Price
(St. John’s Metro):
Applicant Income = $80,000
Home to be purchased: $275,000 home in the City of Mount Pearl
Required down payment: $13,750 (5% of $275,000)
Loan Amount $8,000, Grant Amount = $2,000 (Maximum loan of $12,500, less $2,500($500 for each $1000 over income limit)
Additional funds required = $3,750

EXAMPLE 4
Exceeds Established Income Level, Home Within Established Purchase Price
(Regional Centre):
Applicant Income = $85,000
Home to be purchased: $200,000 home in the community of Clarenville
Required down payment: $10,000 (5% of $200,000)
Loan Amount $3,000, Grant Amount = $2,000 (Maximum Loan of $10,000, less $5,000($500 for each $1000 over income limit)
Additional funds required = $5,000

 

 

Further Information

Inquiries can be made directly to:
Madonna Walsh -- (709) 724-3059 (mrwalsh@nlhc.nl.ca)
Sherry Mercer -- (709) 724-3130 (srmercer@nlhc.nl.ca)

Application

To apply for FHP, print the following application

FHP ApplicationPDF 



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