Becoming a homeowner is a dream cherished by many, and as I mentioned in our September 2023 issue, one that most people feel is unobtainable. As promised, I have been hard at work speaking with as many people as I can, looking for ways to help make finding a home more affordable. I am going to start with home buyers. I realize this problem extends far beyond purchasing a home, but this is where we will begin and continue to expand on information as we move through this topic together. The focus for this issue will be the Affordable Home Ownership Program through the County of Simcoe.
The program is designed for Simcoe County residents who are currently renting and aspire to purchase and maintain homeownership but might face financial barriers when it comes to the initial down payment.
The heart of the Affordable Home Ownership Program lies in its down payment assistance. The program offers up to 10% of the down payment required, with a maximum cap of $50,000. This financial boost is provided at the closing of the deal, and the funds are transferred to your lawyer in trust.
It’s important to note that homes must be purchased within Simcoe County and the assistance is solely directed towards the down payment, easing the initial financial burden of acquiring a home.
To ensure the program’s effectiveness and fairness, there are certain restrictions and guidelines in place:
- The program’s funds cannot be combined with the Federal Homeownership Program.
- The property you intend to purchase must be your primary residence, and you cannot own any other properties. However, the program permits you to rent out a room or have a secondary suite rental unit within your home.
- You must be a current resident of the County of Simcoe to apply, and there is no specific time limit for residency.
- Multiple borrowers or combined families are allowed to apply, provided that all applicants meet the program’s criteria.
One of the most common misconceptions is that you must be a first-time homebuyer to participate in the program. However, the County of Simcoe opens its doors to a broader audience. If you do not currently own any properties, you are eligible to apply, regardless of whether it’s your first home or not.
Getting pre-approved for a mortgage is a crucial step in the home buying process, but it’s important to note that it doesn’t have to be for the program’s maximum purchase price. This flexibility allows you to explore a range of housing options that fit your financial situation.
The County of Simcoe Homeownership Program offers a 20-year forgivable loan, a unique feature that sets it apart. If you reside in your home for 20 years without refinancing for an amount exceeding your original mortgage, no repayment of the loan is required. At that point, the program’s second mortgage will be removed from the title of your property. You do have the ability to refinance your first mortgage while participating in the program. This can be a valuable option if your financial circumstances change during your homeownership journey. Just be sure to confirm with the program office.
The way this loan works is, after securing your mortgage to purchase your home (first mortgage) the $20,000 is registered on title as a second mortgage.
An amazing feature of this program is the absence of monthly payments towards the provided loan. However, it’s important to understand that certain situations might require repayment. Each situation is unique, so make sure to contact the program office for personalized guidance in such cases as bankruptcy, the sale of the property, refinancing etc.
Additionally, you have the option to voluntarily repay the loan at any time, regardless of the reason. The discharge calculation involves the original loan amount, capital appreciation, and legal fees.
The Affordable Home Ownership Program is a valuable resource for residents who are ready to take the leap into homeownership but face financial barriers. By providing down payment assistance and flexible repayment options, this program opens doors to the housing market, empowering individuals and families to achieve their homeownership dreams. I encourage you to reach out to me or visit their website for details and more information.
This is absolutely a program worth exploring.
