What is the Home in Peel Affordable Ownership Program?
The Home in Peel Affordable Ownership Program is designed to provide low-to-moderate income residents who are currently renting a unit in the Region of Peel (Brampton, Caledon or Mississauga) the opportunity to qualify for down payment loan assistance to buy a home in Peel Region.
This program will assist eligible applicants who have a total gross (pre-tax) household income of $80,000 or less to purchase a resale home in the Region of Peel that does not exceed a purchase price of $295,000.
- Applicants must be 18 years of age or older
- Applicants must be a Canadian citizen or have permanent resident status
- Applicants must not own or have an interest in another residential property in Canada or elsewhere
- The home must be the sole and principal residence of the purchaser
- The applicant must currently be renting in Peel and looking to buy a sole and principal residence
- The applicant must have a total gross (pre-tax) household income not exceeding $80,000
- The applicant must be able to obtain a mortgage pre-approval from a bank/lender that is approved and insured by a mortgage default insurer such as Canada Mortgage and Housing Corporation (CMHC) and must submit it with their application
- Participants may not include anticipated rental income from a portion of the property in order to obtain a mortgage
- The applicant must be able to pay all additional closing costs
- The applicant must supply all necessary documentation to the Region of Peel within the required time frame
Due to unpredictability of closing dates, new homes will not be eligible for purchase under the program.
Participants may purchase:
- resale detached homes
- row homes
- town (condominium or freehold) stacked homes
- high-rise condominium units
Duplex, triplex or mobile homes do not qualify as eligible homes under the Home in Peel program.
The maximum house price for program participants in the Region of Peel is$295,000.
The Down Payment Loan
Approved applicants are eligible for $15,000 of down payment assistance.
Repaying the Loan
The loan is for a 20-year period and no interest is charged if:
- The home remains the sole and principal residence of the owner. The home is not rented, leased or sold in the 20-year period.
- On the 20th anniversary date of the agreement, the loan is automatically forgiven provided there has been no default.
- Repayment of the loan is required when:
- The home ceases to become the sole and principal residence of the owner.
- The home is sold before the 20-year period.
If during the 20 year affordability period, the property is resold, transferred, or otherwise disposed, and an appreciation in value is incurred, the purchaser will be required to pay back to the Region of Peel the loan and 5% of the appreciation.
If the home is sold for less than the original purchase price, the principal is forgiven; however, the sale must be at fair market value and must be an arm’s length transaction (meaning the property cannot be sold to a relative).
Other Costs for the Purchaser
The purchaser should be aware that they are required to pay additional closing costs that includes, but is not limited to the following:
- Home inspection fee
- Lawyer’s fees
- Land Transfer Tax
What is Needed to Qualify for the Home in Peel Program?
Interested applicants must complete the application form and provide all supporting documentation and return it to the Region of Peel within the required timeframe.
As funding for this program is limited, participants are selected on a first-come, first-serve basis. Once an application is received, a letter confirming eligibility will be sent within 30 business days. There is no wait list for this program; once all funding has been allocated, all remaining applicants will be notified by letter that the program has ended.
Responsibilities of Purchaser
As a home purchaser, there are various responsibilities when buying your first home:
- Home inspection costs
- Closing costs
- Conditional approvals process
- Repayment of loan by purchaser
- HOME INSPECTION COSTS
As part of the program, a purchaser must conduct a home inspection on the prospective home as a condition of the closing of the transaction. It is in the best interest of the purchaser to have an inspection completed and to be aware of all of the possible concerns and issues, including ones that may be hidden to the eye.
On average, a home inspection usually ranges in price between $200 to $400. This cost is the sole responsibility of the purchaser.
Purchasers under the Affordable Ownership Program should be aware of, and be able to pay for, any additional closing costs incurred during the purchase of a home.
Closing costs include: the deposit, home inspection fee, lawyer’s fees, land transfer costs, title search costs, possible land and/or municipal property tax payments, and any other unanticipated costs. These are all the sole financial responsibility of the purchaser. It is important that the purchaser have extra money available for these costs.
Conditional Approval Process
The conditional approval letter given to eligible purchasers by the Region of Peel during the approval process is a conditional approval only until final first mortgage insurance under-writing review is conducted and approved.
If denial by the lender is received at the final under-writing stage of the home purchasing process, the Region of Peel will not be responsible for any costs, losses or liabilities that are or may be incurred by the individual purchaser. The purchaser would no longer be eligible for participation in the Home in Peel Affordable Ownership Program, and as a result, would not receive the down payment loan assistance.
Repayment of Loan By Purchaser
If a home that is purchased under this program is sold within the first 20 years of ownership by the purchaser then the down payment loan is to be repaid to the Region of Peel plus 5% of the appreciation.