The Canada Mortgage and Housing Corporation (CMHC / SCHL) announced yesterday the termination of the incentive program for first-time homebuyers.

The deadline for submitting new applications or re-submitting previous applications for the program is midnight March 21, 2024, Eastern Canada time, according to the website of this federal institution.

The purpose of this program, launched in 2019, was to help reduce monthly mortgage payments for first-time homebuyers by having the federal government obtain partial ownership of the property.

The government provides a loan of up to 10% of the home's purchase price, allowing the buyer to increase the size of the down payment they make, thereby reducing monthly payments.

The homeowner must repay the incentive after 25 years or when selling the property if this happens before the mentioned period, with the amount due adjusted to reflect changes in the property value.

However, the program was partially hindered due to eligibility requirements, including household income limits and the size of the mortgage the buyer can obtain, which only allowed a small group of applicants to qualify.

"We had many young Canadians asking about this program," said Leah Zlatkin, a mortgage broker and expert in obtaining the lowest mortgage interest rates in Toronto.

But applicants had to meet specific criteria, including those related to annual income and cash savings, making the program restrictive.

Zlatkin said that only two of her clients qualified for the program since the government launched it.

She added that other clients withdrew from the process when they realized they would be entering into a shared ownership agreement with the government.

"Many people lost interest in the program when they realized it was a shared ownership program," Zlatkin said, adding that these people looked for other funding sources because they did not want to share ownership with the government as values increased.

After Zlatkin thought the program was a good idea, she found out it was an "administrative nightmare," as the cost of managing it was very high compared to the number of accepted applicants.

 Zlatkin said, "If very few people use the program, then why continue it?"