Lower down payments for homebuyers

A non-profit organization has recently introduced a novel suggestion to address the issue of affordability in the Lower Mainland, especially in the strained Vancouver market which has seen real estate prices spike to levels that have placed homes out of reach of the average middle-class household.

Attainable Homes, which is owned by the City of Calgary, offers one- to three-bedroom townhomes and condominium units priced at $220,000, in contrast with the $240,000 median price for these housing types. Families can buy the non-profit’s offerings with only a $2,000 down payment.

Officials said that the program has seen considerable success in Calgary since even financially struggling buyers that earn less than $90,000 per annum can participate in the housing market—in turn allowing the city to earn funds that it can subsequently use for more housing projects.

CEO John Harrop said that they can provide the homes for such low prices since the company shoulders approximately 4 to 5 per cent of the costs, with banks covering the remaining 95 per cent with mortgage.

“We do bulk-buy units or we develop them ourselves, so the actual cost of the unit is slightly cheaper than it would be in the market. They tend to be more modest, so typically we would have laminate countertops, instead of marble or granite — carpet instead of hardwood,” Harrop told CBC News.

The setup might help more Vancouver families get adequate housing, Harrop noted.

“That’s everything from fully supported social housing to below-market housing to market rental to affordable housing. It is a model that should, in theory, work in Vancouver,” Harrop said.

Source: Real Estate Professional – by Ephraim Vecina 17 Feb 2016

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