The funding is expected to benefit first-time home buyers in the Golden Horseshoe region
The federal government has announced that it will be making a substantial investment into shared equity mortgages for first-time home buyers in Ontario.
The $1-million federal investment through the government’s Shared Equity Mortgage Providers (SEMP) fund will be in the form of a repayable loan to Arch Canada Holdings. This sum will go to shared equity mortgages that Arch Canada will be providing directly to first-time home buyers in the Golden Horseshoe region of Ontario, with a focus on the city of Hamilton.
“Shared equity mortgages allow eligible home buyers to reduce their monthly mortgage payment without increasing the amount they must save for a down payment,” the Canada Mortgage and Housing Corporation said. “The Arch Canada shared equity mortgage is a co-investment with the homebuyer, is not interest bearing, requires no monthly payment and is repaid along with a percentage of property appreciation or depreciation when the property is sold.”
Arch Canada focuses on first-time home buyers who have a solid, stable cash flow but are unable to save for the required down payment to enter higher-priced, appreciating markets, the company said.
The SEMP fund, which was launched in 2019, is a $100-million federally administered lending fund that helps support existing shared equity mortgage providers, attract new providers, and encourage additional housing supply, CMHC said.
