Homeowners and first time homebuyers may benefit from a few lesser-known programs

MOOSE JAW — To address the concerns of homeowners and first-time homebuyers in Moose Jaw’s current housing market, Janelle Bookout, a mobile mortgage specialist with the Conexus Credit Union has offered some advice on a few lesser-known programs that could help residents navigate the economic situation.

First Home Savings Account (FHSA)

One of the leading concerns among first-time homebuyers is the challenge of saving for a down payment.

“The federal government has a new program introduced… late in 2023 and it’s called the First Home Savings Account (FHSA),” Bookout explained. “The FHSA provides a real advantage to anybody who’s looking to buy this year or even in the next few years.”

Any contributions made to the FHSA will be set aside with the same benefits as an RRSP. Contributions can come from personal savings or gifts, and a portion can be automatically contributed from each paycheck. As a bonus, the contribution may also offer a tax break for the contributed amount.

The program has a limit of $8,000 per person per year for a lifetime maximum of $40,000 — enough to make a suitable down payment on a house.

“The beautiful thing is you don’t have to put money into the savings account and wait to use it,” Bookout explained. “If an immediate family member gifts you the down payment on a Monday, you can put it into your FHSA and then withdraw it on Tuesday to buy your house. There’s no waiting period on it.”

For more information, visit Canada.ca and search for “First Home Savings Account (FHSA).”

Canadian Mortgage Charter

In the 2024 federal budget, the Government of Canada announced it would amend mortgage rules to now permit up to 30-year mortgage terms for first-time homebuyers who are purchasing new builds.

Prior to Aug. 1, homebuyers with a down payment of 20 per cent or less were required to take a 25-year amortization on their home. That 25-year term was the maximum allowable term for this purpose, Bookout explained.

Starting Aug. 1, the Canadian Mortgage Charter has been strengthened to help more Canadians purchase their first home and receive lower monthly payments. “This is about restoring generational fairness to the housing market for younger Canadians,” the government’s website stated.

Bookout added that the federal program also seeks to address the current housing shortage.

“We have a housing shortage in Saskatchewan and Canada, so the federal government is looking to promote new housing developments because we are so in need of it,” Bookout explained.

With a 30-year amortization term, the result for new home buyers is a decreased monthly mortgage payment which is intended to help manage cashflow.

A first-time homebuyer is defined as a borrower who has never purchased a home before, has not occupied a principal place of residence in the past four years that they or their current spouse or common-law partner owned, or a borrower who is recently divorced (as defined in the Home Buyers’ Plan).

A newly constructed home is a property that is recently constructed and was not previously occupied for residential purposes.

For more information, visit Canada.ca and search for “Canadian Mortgage Charter.”

Saskatchewan Secondary Suite Incentive Program

“I’m also encouraging many of my homebuyers… to look into the Saskatchewan Secondary Suite Incentive Program (SSI),” Bookout added.

The SSI grant program is intended to increase the number of available rental units in the province and to improve housing affordability by allowing homeowners to generate supplementary income.

“This doesn’t just have to be on brand new builds,” she said. “This program can be on an existing house or a brand new house, but the house must be owner occupied.”

The program could offer as much as $35,000 through a federal grant to develop a rental suite on the property of qualified homeowners, so it’s worth investigating.

“This is something that not enough people know about…. And it could open some doors,” Bookout said.

For more information about the SSI grant program and to confirm eligibility, visit Saskatchewan.ca.

“The tagline that I’ve used for some of my clients is ‘Date the rate; marry the house,’” Bookout said. “The important thing is just budgeting and focusing on what’s in your control.”

Finding out what’s in your power to control will help turn around what can be a confusing or frustrating situation. It’s always best to speak with a mortgage expert to leverage their expertise. To speak with a financial advisor, simply contact your bank or credit union and request an appointment.

To speak with Janelle Bookout at the Conexus Credit Union, visit Conexus.ca/Janelle-Bookout.

The Conexus Credit Union is located at 80 High Street West and can be reached at 306-690-1449.