Federal government launches new program supporting affordable homeownership

OTTAWA, July 31, 2019 /CNW/ - All Canadians deserve to have a safe and affordable place to call home. That is why today, the Government of Canada is introducing an innovative new tool to assist providers of shared equity mortgages in helping eligible Canadians achieve affordable homeownership.

Logo: Government of Canada (CNW Group/Canada Mortgage and Housing Corporation)

The Shared Equity Mortgage Providers (SEMP) Fund is a $100-million lending fund that will help support existing SEMPs, attract new providers of shared equity mortgages and encourage additional housing supply. The Shared Equity Mortgage Providers Fund is a 5-year program managed by Canada Mortgage and Housing Corporation (CMHC) that launched on July 31, 2019.

A separate $1.25 billion First-Time Home Buyer Incentive program that will directly support first time homebuyers is expected to launch on September 2, 2019.

Shared equity mortgages allow eligible homebuyers to reduce their monthly mortgage payment without increasing the amount they must save for a down payment. The shared equity mortgage typically requires no monthly payment, and is repaid along with a percentage of property appreciation or depreciation when the property is sold.

The Shared Equity Mortgage Providers Fund aims to assist in the completion of 1,500 new units and help at least 1,500 Canadians buy their first home.

The program offers eligible proponents repayable loans from two possible funding streams:

Stream 1 – Preconstruction Loans

Preconstruction cost loans to commence new housing projects that provide shared equity mortgages to home purchasers via SEMPs. A commitment to reserving a certain percentage of units for first time homebuyers as defined by the Government of Canada's Home Buyers' Plan will be considered a strength on the application.

Stream 2 – Shared Equity Mortgages (SEM)

Loans to SEMPs to fund shared equity mortgages that they provide directly to first time homebuyers.

CMHC will start receiving applications immediately from SEMPs – visit here.

"Affordable homeownership is a pressing concern for many young Canadians. Access to funding for SEMPs will encourage the new construction needed to address some of the housing supply shortages in Canada while making housing more affordable for Canadians" –
– Jean-Yves Duclos, Minister of Families, Children and Social Development and Minister Responsible for Canada Mortgage and Housing Corporation

"As our Government continues to make big investments in building new affordable homes across this country, we also need to find new ways to help more people buy homes today. That's what this fund is all about - an innovative approach that can take some of the mortgage burden off homeowners, and help more hard-working families find and afford a good place to call home." – Bill Morneau, Minister of Finance

Quick Facts about the Shared Equity Mortgage Providers Fund program

The Shared Equity Mortgage Providers (SEMP) fund program will assist providers of shared equity mortgages in helping eligible Canadians achieve affordable homeownership.
The SEMP fund program is a 5-year program launched on July 31, 2019.
This $100-million lending fund, administered by CMHC, will support existing SEMPs, help attract new providers of shared equity mortgages and encourage additional housing supply.
The program will offer eligible proponents loans from two possible funding streams: Pre-construction (stream 1) and Shared Equity Mortgages (stream 2)
Stream 1 is for loans for pre-construction costs to commence new housing projects that provide shared equity mortgages to home purchasers.
Stream 2 provides loans to SEMPs to fund shared equity mortgages provided by the proponent directly to first time home purchasers.
Non-profit organizations, other level of governments and for-profit organizations may be eligible to apply.
The Government of Canada's National Housing Strategy (NHS) is an ambitious 10-year, $55 billion plan that will create 125,000 new housing units, repair and renew more than 300,000 housing units and reduce chronic homelessness by 50 percent, with the target of removing 530,000 families from housing need.
The NHS is built on strong partnerships between federal, provincial and territorial governments, and on continuous engagement with others, including municipalities, Indigenous governments and organizations, and the social and private sectors, to make a meaningful difference in the lives of Canadians.

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As Canada's authority on housing, CMHC contributes to the stability of the housing market and financial system, provides support for Canadians in housing need, and offers unbiased housing research and advice to all levels of Canadian government, consumers and the housing industry. CMHC's aim is that by 2030, everyone in Canada has a home they can afford, and that meets their needs. For more information, please visit cmhc.ca or follow us on Twitter, Instagram, YouTube, LinkedIn and Facebook.