Here's everything you need to know about the new down payment assistance program with PEI Government!
How much financing is available under this program?
Eligible applicants can apply to receive a conditionally interest free loan of up to five per cent of the purchase price of a home, to a maximum loan of $11,250.
The loan proceeds must go toward the down payment for the home and cannot be used for financing, closing or other costs.
The loan will bear interest at the fixed rate of 5% per annum, which will accrue and accumulate during the term of the loan and will be forgiven when the loan principal has been repaid in full.
Payments during the term of the loan will be applied to loan principal, but should the program participant default on their repayment obligations under their loan, the unpaid loan principal and accumulated accrued interest will become due in full.
Participants may opt to waive their payments for the first year of the loan, to allow the new home owners to adjust to any unforeseen costs.
Am I eligible to apply?
For an applicant to be eligible for the assistance, the following criteria must be met:
- That at least one applicant is a Canadian citizen
- The applicant is a first-time home buyer
- The applicant’s total household income is $80,000 or less
- The purchase price of the home may not exceed $225,000
- The property is in Prince Edward Island
- The applicant does not have the financial ability to pay 5% of the purchase price without assistance of the program
Are there any other requirements for this program?
- The applicant must be pre-approved for an insured mortgage by a recognized financial institution
- The applicant will have a satisfactory credit rating and must not have any defaulted outstanding debt obligation on file in the Province’s Central Default Registry
- The purchased property must be the applicant’s principal residence; rental properties, seasonal and recreational properties are not eligible
- Mobile homes are eligible provided they are permanently affixed to a property owned by the applicant
How do I apply?
Eligible applicants are to complete and submit the Down Payment Assistance Application form, along with the following supporting information:
- A Notice of Assessment from the Canada Revenue Agency (CRA), or a Proof of Income Statement (Option “C” Print Report) from CRA, for the prior tax year from each applicant
- A copy of the Applicant’s Pre-Approval for the first mortgage financing
- A copy of the Applicant’s Agreement of Purchase and Sale for the home being purchased
- A signed declaration showing that the Applicant(s) have no previous home ownership and do not have the financial ability to pay 5% of the purchase price without the assistance of the program (Please note that a Commissioner of Oaths is available at Finance PEI and can sign your declaration free of charge)
- A copy of the Applicant’s Birth Certificate or Passport
- A written verification of employment confirming your date of hire, position, annual income for 2018, employment status: Full Time, Part Time, Casual, Seasonal, Term and the probability for future or continued employment.
What happens after I apply?
After you apply for the program, Finance PEI will contact you to discuss your application and next steps to determine eligibility.
Where can I find application forms for this program?
The Down Payment Assistance Program Application Form is available here for download online.