A new government initiative will help Yukoners pay the down payment on their first house.
The program provides low-interest loans of up to $18,000 to cover up to five per cent of the purchase price of the home.
To qualify, the applicant must be a Yukon resident with a household income of no more than $90,000. They must qualify for a bank mortgage and contribute at least 2.5 per cent towards the down payment.
The program is “targeting the people who are trying to get into housing but are struggling,” said Scott Kent, the minister responsible for the Yukon Housing Corporation.
“We’re certainly not targeting those who are in the market to afford homes that are in the half-million dollar range or more.”
In addition to qualifying for a mortgage, the applicant must also meet with one of the housing corporation’s lending experts to talk about the challenges of home ownership.
“It doesn’t mean just going into a bank, filling in an application and then signing on the dotted line, and that makes you a homeowner,” said Pamela Hine, president of the Yukon Housing Corporation. “There’s a lot of other things, especially if you’re coming from a rental accommodation into being homeowners.”
The corporation has earmarked $1 million for the program, but that could be reviewed depending on demand, said Hine.
Loans will be offered at a two per cent interest rate, compounded on a semi-annual basis. They will be based on a five-year term, amortized over 15 years. The homeowner will be required to pay back the entire loan plus interest upon sale of the house.
The program is a step in the right direction, said Kate White, MLA with the NDP and recent first-time home buyer.
“The one big concern about it, is it’s just another one-off, it’s just another ad-hoc approach,” she said. “What the territory really needs is a comprehensive housing strategy.”
And while the initiative has merit, the Yukon Party can’t take all the credit for the idea, said White.
“It was first brought forward by the Yukon Anti-Poverty Coalition in February 2011. The NDP thought it had so much merit that we put it in our 2011 election platform.”
White hopes that people get educated about the challenges of buying a first home, she said.
“There’s a lot more than just the five per cent down. There’s the lawyer’s cost, there’s getting the home inspection, there’s the first tank of fuel, there’s all these things that compound very quickly.”
Still, moving people from rental housing to ownership is a good thing, she said.
“I’m pretty stoked that they implemented one of our platform items.”
Contact Jacqueline Ronson at
jronson@yukon-news.com