June 20, 2024 • 7 mins
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In this episode, Brandon shares how you can use municipal downpayment programs to help get into the housing market. He covers who's eligible, how they work, and 3 examples of different real life use cases from his clients.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
you want to be a homeowner butdon't have a down payment save,
I'm going to show you how to usemunicipal down payment programs so
that you can get your first homeand start building wealth through
real estate.
In this video, I'll show you who's
eligible for these programs, howthey work, and stick around to the
end because there's several usecases that you might not think of.
My name is Brandon Love and I'mthe co-host of the Canadian
Mortgage Guide.
I have helped hundreds of clients
(00:21):
with mortgages and this strategyis one I've helped several people
use to get their first door.
key parts of this program, there's
three steps to it.
First things first, you need to
get pre-approved.
You need to show the bank and the
municipal lenders that if you hada down payment, you would be able
to cover the costs of carrying themortgage and running the home.
So that's an online applicationthat we would do.
(00:43):
You're going to input youremployment history, your living
history, and then we will do acredit poll there.
With that, when it comes topopulating the down payment
section, that's where we inputwhat would come from the
municipality.
So how this works is if you meet
each municipality's criteria, theywill give you 10% towards the down
payment.
That 10% is a zero interest loan
and it is forgiven at a certaintime marker.
(01:06):
So most of them, it's 20 years.
How it works is if you keep the
home for 20 years with youoccupying it, the loan is
forgiven.
If you sell the property before
that point, you have to pay themback plus any market appreciation.
So it's a wonderful way to getyour foot in the door and help you
get over that hump of saving upfor the down payment.
So you might be wondering who'seligible for this.
(01:27):
This program is designed forpeople who are currently renting
and have a reasonable handle ontheir day-to-day spending.
So no bankruptcy, no collections,nothing like that.
You basically have life prettymuch covered, but you're currently
a renter and you want to become ahomeowner.
The idea here is that the biggesthurdle to you becoming a homeowner
is saving up for that downpayment.
So most of your money probablygoes to rent and the cost of
(01:47):
living.
So you can never set aside enough
money to get the down payment.
The market continues to increase
with appreciation of properties,and you can never catch up enough
to get into the property pool.
So I'm going to give an example of
one.
This one's in Lambton County, so
kind of like the Sarnia area.
This is a checklist of what their
criteria would look at.
So number one, currently renting.
Number two, plan to live in thehome.
(02:07):
Number three, total income under$99,000.
Number four, total assets under$100,000.
Home priced at $325,000, which youcan actually get homes for that in
that area.
If you're looking for an area with
a lower cost of living, this isdefinitely a great area and has
awesome industries as well.
The home has to be located within
the county and you need to dotheir application form as well.
(02:29):
Obviously, there's some veryspecific criteria shown there.
So just as a general guideline,this program is not for a few
types of people.
Number one, people with bad
credit.
Unfortunately, you're going to
have to go alternative lending ifyour credit is very bad.
And this program is only offeredwith insured lending, which is on
the A side.
Number two is people living with
their parents.
It would be awesome if you could
(02:50):
do that.
But this program is designed
specifically for clients who arecurrently tenants.
And number three, people with highnet worth.
So if you've been renting andsaving a lot and you're like, oh,
I'm going to jump on this programand just keep my money invested.
It doesn't work that way.
OK, the program here is designed
for people who don't have savingsfor the down payment.
A lot of people's mindsimmediately go to people who are
(03:12):
like lower class, poor kind ofthing when I talk about programs
like that.
But that's not the case.
And I want to show three differentapplications I've worked on
personally, because it shows kindof the different ways that you can
use programs like thisstrategically.
First one here, I'll call her homesweet home.
It was a single mother who wasrenting.
It was a single mother who She wasrenting.
wanted to get a home closer kidsschool, She wanted to get a home
(03:34):
close to her kid's and she plannedto live there school, long term.
So she had a job.
We were able to use her child
support payments and Canada ChildBenefit, plus her income to
qualify for the mortgage.
The county gave her the 10%
towards a down payment.
She got a home close to her kid's
school, and she plans to livethere for the next 20 years.
So she'll get the loan forgiven atthat point.
So it's going to be free money forher.
And the added bonus to this filewas that we put her on accelerated
(03:55):
bi-weekly payments.
So once the county program falls
off at the 20-year marker, sheonly owes two and a half more
years of paying that mortgage, andshe will own the entire home
outright.
So really amazing there.
She has a home for her It's kids.
exactly what she and wants, she
can build the entire homeoutright.
So really amazing She there.
has a home for her kids.
It's exactly what she wants, andshe can build her life that way.
(04:17):
So really beautiful use case ofthis program working.
The second one here, the clientsjust really wanted to get on the
property ladder, but didn't have adown payment saved.
They were a young couple who wasjust getting started together.
They just hadn't accrued thatwealth yet.
They didn't want to keep renting.
They were watching that the market
kept going up year after year andfelt like they were never going to
get on the ladder if they couldn'tget started.
So we used this program to helpthem with the down payment and it
allowed them to get their firsthome.
(04:38):
So what they ended up doing isthey sold the home five years
later and they repaid the countyfor the initial down payment plus
a little bit of appreciationthere.
So the equity they had built inthat home allowed them to leapfrog
and get the next property withoutany county programs or anything
like that.
It was just used as a stepping
stone and it was a really greatway for them to kind of game
system and create an opportunitywhere they were otherwise strapped
for cash.
This one here was actually pretty
cool and I'm going to call themthe portfolio builder.
(05:01):
So she used the program to buy afixer upper and it was a pretty
rough property, but she was asingle borrower.
She was very determined to justpour sweat equity into the
property.
So what she did is she kind of
YouTube videos.
She asked for help from people she
knew and she converted theproperty into a duplex.
From there, what she did is sherefinanced the unit and she took
the equity from that and she paidthe county back because there is a
(05:23):
caveat that there can't be arental in these county programs.
So she paid the county back, butusing the rent from the duplex,
the second unit, it allowed her tohouse hack, which we have a video
of, you can check out.
And it allowed her to have her
mortgage paid by the tenant livingin the other unit.
So a really big win for her.
She got her first door.
She built massive appreciationthere and she now has the mortgage
(05:45):
covered by the tenant.
So a really great win.
So there's three use cases there.
I'm sure if you're a creative
person, you can also think ofseveral opportunities that you
might be able to apply this to.
A lot of people ask me, well, is
this available in my area?And it's not everywhere, full
disclosure to that.
There are certain counties that do
it, certain municipalities,certain ones have smaller down
payment programs, certain oneshave different restrictions.
So it's a lot to figure out.
(06:06):
But the good thing is you can work
directly with me.
I have a list built out of all the
places that offer this and thenuances of the programs figured
out as well as the lenderrelationships to help these
actually get funded.
So if this is something that's a
fit for you or someone in yourfamily or your network, have them
connect with me.
They can book a call at
meetwithbrandon.ca and I'll walkthem through all the details and
(06:28):
nuance and see if it's the rightfit for them.
If you enjoyed this video andthink it would be helpful to
someone who's trying to get in themarket, please share it with them.
Hit like and subscribe.
It really motivates us to create
more content and to help you growand prosper in the Canadian
mortgage market.
Have an awesome day.
you want to be a homeowner butdon't have a down payment save,
I'm going to show you how to usemunicipal down payment programs so
that you can get your first homeand start building wealth through
real estate.
In this video, I'll show you who's
eligible for these programs, howthey work, and stick around to the
end because there's several usecases that you might not think of.
My name is Brandon Love and I'mthe co-host of the Canadian
Mortgage Guide.
I have helped hundreds of clients
(00:21):
with mortgages and this strategyis one I've helped several people
use to get their first door.
key parts of this program, there's
three steps to it.
First things first, you need to
get pre-approved.
You need to show the bank and the
municipal lenders that if you hada down payment, you would be able
to cover the costs of carrying themortgage and running the home.
So that's an online applicationthat we would do.
(00:43):
You're going to input youremployment history, your living
history, and then we will do acredit poll there.
With that, when it comes topopulating the down payment
section, that's where we inputwhat would come from the
municipality.
So how this works is if you meet
each municipality's criteria, theywill give you 10% towards the down
payment.
That 10% is a zero interest loan
and it is forgiven at a certaintime marker.
(01:06):
So most of them, it's 20 years.
How it works is if you keep the
home for 20 years with youoccupying it, the loan is
forgiven.
If you sell the property before
that point, you have to pay themback plus any market appreciation.
So it's a wonderful way to getyour foot in the door and help you
get over that hump of saving upfor the down payment.
So you might be wondering who'seligible for this.
(01:27):
This program is designed forpeople who are currently renting
and have a reasonable handle ontheir day-to-day spending.
So no bankruptcy, no collections,nothing like that.
You basically have life prettymuch covered, but you're currently
a renter and you want to become ahomeowner.
The idea here is that the biggesthurdle to you becoming a homeowner
is saving up for that downpayment.
So most of your money probablygoes to rent and the cost of
(01:47):
living.
So you can never set aside enough
money to get the down payment.
The market continues to increase
with appreciation of properties,and you can never catch up enough
to get into the property pool.
So I'm going to give an example of
one.
This one's in Lambton County, so
kind of like the Sarnia area.
This is a checklist of what their
criteria would look at.
So number one, currently renting.
Number two, plan to live in thehome.
(02:07):
Number three, total income under$99,000.
Number four, total assets under$100,000.
Home priced at $325,000, which youcan actually get homes for that in
that area.
If you're looking for an area with
a lower cost of living, this isdefinitely a great area and has
awesome industries as well.
The home has to be located within
the county and you need to dotheir application form as well.
(02:29):
Obviously, there's some veryspecific criteria shown there.
So just as a general guideline,this program is not for a few
types of people.
Number one, people with bad
credit.
Unfortunately, you're going to
have to go alternative lending ifyour credit is very bad.
And this program is only offeredwith insured lending, which is on
the A side.
Number two is people living with
their parents.
It would be awesome if you could
(02:50):
do that.
But this program is designed
specifically for clients who arecurrently tenants.
And number three, people with highnet worth.
So if you've been renting andsaving a lot and you're like, oh,
I'm going to jump on this programand just keep my money invested.
It doesn't work that way.
OK, the program here is designed
for people who don't have savingsfor the down payment.
A lot of people's mindsimmediately go to people who are
(03:12):
like lower class, poor kind ofthing when I talk about programs
like that.
But that's not the case.
And I want to show three differentapplications I've worked on
personally, because it shows kindof the different ways that you can
use programs like thisstrategically.
First one here, I'll call her homesweet home.
It was a single mother who wasrenting.
It was a single mother who She wasrenting.
wanted to get a home closer kidsschool, She wanted to get a home
(03:34):
close to her kid's and she plannedto live there school, long term.
So she had a job.
We were able to use her child
support payments and Canada ChildBenefit, plus her income to
qualify for the mortgage.
The county gave her the 10%
towards a down payment.
She got a home close to her kid's
school, and she plans to livethere for the next 20 years.
So she'll get the loan forgiven atthat point.
So it's going to be free money forher.
And the added bonus to this filewas that we put her on accelerated
(03:55):
bi-weekly payments.
So once the county program falls
off at the 20-year marker, sheonly owes two and a half more
years of paying that mortgage, andshe will own the entire home
outright.
So really amazing there.
She has a home for her It's kids.
exactly what she and wants, she
can build the entire homeoutright.
So really amazing She there.
has a home for her kids.
It's exactly what she wants, andshe can build her life that way.
(04:17):
So really beautiful use case ofthis program working.
The second one here, the clientsjust really wanted to get on the
property ladder, but didn't have adown payment saved.
They were a young couple who wasjust getting started together.
They just hadn't accrued thatwealth yet.
They didn't want to keep renting.
They were watching that the market
kept going up year after year andfelt like they were never going to
get on the ladder if they couldn'tget started.
So we used this program to helpthem with the down payment and it
allowed them to get their firsthome.
(04:38):
So what they ended up doing isthey sold the home five years
later and they repaid the countyfor the initial down payment plus
a little bit of appreciationthere.
So the equity they had built inthat home allowed them to leapfrog
and get the next property withoutany county programs or anything
like that.
It was just used as a stepping
stone and it was a really greatway for them to kind of game
system and create an opportunitywhere they were otherwise strapped
for cash.
This one here was actually pretty
cool and I'm going to call themthe portfolio builder.
(05:01):
So she used the program to buy afixer upper and it was a pretty
rough property, but she was asingle borrower.
She was very determined to justpour sweat equity into the
property.
So what she did is she kind of
YouTube videos.
She asked for help from people she
knew and she converted theproperty into a duplex.
From there, what she did is sherefinanced the unit and she took
the equity from that and she paidthe county back because there is a
(05:23):
caveat that there can't be arental in these county programs.
So she paid the county back, butusing the rent from the duplex,
the second unit, it allowed her tohouse hack, which we have a video
of, you can check out.
And it allowed her to have her
mortgage paid by the tenant livingin the other unit.
So a really big win for her.
She got her first door.
She built massive appreciationthere and she now has the mortgage
(05:45):
covered by the tenant.
So a really great win.
So there's three use cases there.
I'm sure if you're a creative
person, you can also think ofseveral opportunities that you
might be able to apply this to.
A lot of people ask me, well, is
this available in my area?And it's not everywhere, full
disclosure to that.
There are certain counties that do
it, certain municipalities,certain ones have smaller down
payment programs, certain oneshave different restrictions.
So it's a lot to figure out.
(06:06):
But the good thing is you can work
directly with me.
I have a list built out of all the
places that offer this and thenuances of the programs figured
out as well as the lenderrelationships to help these
actually get funded.
So if this is something that's a
fit for you or someone in yourfamily or your network, have them
connect with me.
They can book a call at
meetwithbrandon.ca and I'll walkthem through all the details and
(06:28):
nuance and see if it's the rightfit for them.
If you enjoyed this video andthink it would be helpful to
someone who's trying to get in themarket, please share it with them.
Hit like and subscribe.
It really motivates us to create
more content and to help you growand prosper in the Canadian
mortgage market.
Have an awesome day.
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