The City of Flin Flon is taking a new approach to help people buy homes in the community - covering much of home buyers’ down payments to get them to build or move into town.
City council passed a resolution to establish what it calls the Home Buyer Assistance Program (HBAP) during their April 26 meeting, a program that will cover part of potential homeowners’ down payments when they seek to either buy a house or property that will be used as a residence, potentially covering thousands in otherwise out-of-pocket costs. The program is slated to be officially kicked off by the City May 16, with the program running for just over 10 months - the HBAP is, as of press time, slated to end March 31 of next year.
“The City of Flin Flon proposes to introduce a home buyer assistance program which shall subsidize the down payment of mortgages, by way of a forgivable loan to be obtained by eligible first-time home buyers in Flin Flon,” reads the proposal for the project, a copy of which was obtained by The Reminder.
The funds for the program come from a grant received by the City from Manitoba Housing last year, where the City received $421,000 in one-time funds to develop and support affordable housing.
As part of this program, the City has proposed subsidizing home buyers with up to eight per cent of a down payment for homes up to $200,000 in value.
With a maximum of $200,000 for the program, at eight per cent, the City is offering to cover up to $16,000, in the form of a forgivable loan to be earned over 20 years, to help homebuyers pay for what the City calls a “Tier I” home. About $208,000 of the Manitoba Housing money has been set aside for the Tier I part of the program.
The City will cover up to the same amount for a so-called “Tier II” home, only with $8,000 devoted to a down payment and another $8,000 for renovation and improvements. Another $208,000 has been set aside for Tier II homes, split in half for down payments and for renovations.
That subsidy would apply to anyone buying a current detached house or duplex for residential use, buying and fixing up a vacant building for residential use or buying property and building a house for residential use.
“The City of Flin Flon anticipates that the HBAP will encourage residents that are presently leasing for housing to consider shifting to ownership of housing, which in effect is expected to free up housing inventory on the rental market while expanding the housing stock in Flin Flon via a multi-option approach,” reads the project proposal.
Goals stated for the project, according to the City, include freeing up the number of rental housing units available in the city, keeping people now living in rental housing living here, increasing options for residential housing and giving a boost for housing rehabilitation.
There are catches with the application process. To be eligible, the applicant must not have an annual household income over $63,450 (or $84,600 with dependents) and must have lived in Flin Flon for at least six months prior to filing (if they are purchasing an existing home). Applicants must also not own any other residential properties in Manitoba, must be able to pre-qualify for a mortgage and must commit to having home insurance for the duration of the loan. Only Canadian citizens can apply for the program.
If applicants transfer the title of their home through the program before the 20-year loan period is up, they would have to repay the balance of the loan, according to the current project blueprint.
“The applicant commits to register security against the title by way of a forgivable loan to be earned over 20 years… a transfer in title within the 20 years shall result in the applicant having to repay the balance of the forgivable loan for the remaining years,” reads the project proposal.
