# No-Down-Payment Mortgages Exist in Canada



## Barwelle (Feb 23, 2011)

Or, at least, nearly-no-down-payment. All you need is $2,000 and max $80,000 household income. This organization "gifts" you the min. 5% down payment (which is paid back somehow down the road). It's a non-profit created by City of Calgary, though it's supposedly financially self-sufficient according to their website.

http://attainyourhome.com/

I'm not generally opposed to giving people a hand up if they're willing to work for it on their end as well, but this seems kind of hokey to me. Does this sound like the lead-up to the US housing crisis to anyone else? Their goal is to make house ownership more affordable for "moderate income Calgarians"... but I see it as having the opposite effect (allowing people who can't quite afford to buy homes to buy homes which increases demand which pushes up prices.)

Thoughts?


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## Just a Guy (Mar 27, 2012)

There aren't very many properties available in Calgary that people with 80k income could qualify for in the first place. The few that do come up are snatched up by investors before they'd see them.

Besides, the more people looking at the low range, the higher the prices will get.


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## doctrine (Sep 30, 2011)

There are plenty of banks that will loan you the 5% in one way or another so that you don't actually have to put money down on a house. Naturally how much depends on the house price and your income but its pretty easy to do if that's what you're interested in.


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## Echo (Apr 1, 2011)

These guys are advertising no down payments in Lethbridge and Medicine Hat through a "unique 9-year mortgage assistance plan". http://www.cclhomes.com/#

I dug around to see if it was a scam but it does look legit. Not sure what buyers need to qualify, though.


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## OptsyEagle (Nov 29, 2009)

This sounds like exactly how the US financial crisis got started. Trying to figure out how to put people in homes that they cannot afford...and then they wonder what when wrong, later. 

Heck, we don't even have Goldman Sachs here to blame it all on when the house of cards comes falling down.


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## peterk (May 16, 2010)

Interesting. Is this a new development or has this been going on all along over the years?


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## dougbos (Jun 4, 2012)

With new federal financial regulations that are in place, federally regulated lenders are not allowed to offer cashbacks to create a zero down payment. There are a few lenders that will allow a flex down where you can borrow the DP from a credit card or line of credit. These repayments are counted into your debt ratios when an application is made. There is one Ont credit union that allows 0 DP via cashback but the person would be paying 5.34% interest. They reqire a high credit score and must be carrying little if any debt.Most lenders now require the down payment to be from the applicants own resources.


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## Taraz (Nov 24, 2013)

dougbos said:


> With new federal financial regulations that are in place, federally regulated lenders are not allowed to offer cashbacks to create a zero down payment. There are a few lenders that will allow a flex down where you can borrow the DP from a credit card or line of credit. These repayments are counted into your debt ratios when an application is made. There is one Ont credit union that allows 0 DP via cashback but the person would be paying 5.34% interest. They reqire a high credit score and must be carrying little if any debt.Most lenders now require the down payment to be from the applicants own resources.


Not only that, but I thought that down payments could not be borrowed. If you have to pay back the City of Calgary money, that sure sounds like a loan to me.


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## sags (May 15, 2010)

People can still borrow the down payment from their family. That was driving the condo market in Toronto.

Auto companies have increased the number of "subprime" auto loans they are giving out.

Subprime mortages, subprime auto loans............all sounds familiar.

I wonder who gets stuck holding the bag this time.


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## OhGreatGuru (May 24, 2009)

sags said:


> People can still borrow the down payment from their family. That was driving the condo market in Toronto.
> 
> ....


Yes, you can, and lots of people do it. But it means effectively perjuring themselves on their mortgage application.


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## swoop_ds (Mar 2, 2010)

There was a company in Saskatchewan doing this sort of thing. From what I remember, you pay them the 5% back over time with little to no interest. You needed to be in some sort of 'sweet spot' of being able to qualify for a house but not make too much income so that you didn't qualify for the 5% assistance loan. I also think it was only if you moved into the low income homes that the company itself was building.


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## sags (May 15, 2010)

There is always "rent to own" for the truly financially challenged.


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## dougbos (Jun 4, 2012)

Taraz said:


> Not only that, but I thought that down payments could not be borrowed. If you have to pay back the City of Calgary money, that sure sounds like a loan to me.


A person would have to check the Calgary program for details. Several Ontario counties had these types of programs a few years back. There was a maximum income level in effect. The down payment was a gift (forgiven) if the person lived there for X years (15 I recall). It the house was sold during that time the amount had to be paid back prorated to the number of years they had lived there.


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## Barwelle (Feb 23, 2011)

peterk said:


> Interesting. Is this a new development or has this been going on all along over the years?


Website says it started in 2009. And that they've assisted with over 250 homes to date.



dougbos said:


> A person would have to check the Calgary program for details. Several Ontario counties had these types of programs a few years back. There was a maximum income level in effect. The down payment was a gift (forgiven) if the person lived there for X years (15 I recall). It the house was sold during that time the amount had to be paid back prorated to the number of years they had lived there.


The Calgary program has similar requirements. From their website:

Maximum household income of $90,000 per annum for single and dual parent families with dependent children living in the home
Maximum household income of $80,000 per annum for singles and couples with no dependent children living in the home
Your assets are less than $100,000 (excluding primary vehicle, RESP, RRSP & pension)
You can qualify for a mortgage and put $2,000 of your own money down
You're willing to take part in one of our home education sessions
Your Attainable Home will be your permanent sole residence.

The 5% down payment put forward by the program does not have to be repayed; rather, the program gets a portion of the increase in value of the home if/when the homeowner sells. 100% of the appreciation if the owner sells in less than one year, scaling down to 25% if the owner stays 3+ years.

Edit: If you dig around, read their 2013 busines plan pdf, they pitch it as a step between subsidized housing and people who can get a standard mortgage unassisted.


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## davejmortgage (Jan 20, 2014)

*No money down mortgage somewhat exists*



OhGreatGuru said:


> Yes, you can, and lots of people do it. But it means effectively perjuring themselves on their mortgage application.


Depending on ones credit score and stability, there are legal variations that garner results similar to the no-down-payment mortgage.


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## Siwash (Sep 1, 2013)

ANd this is part of what is causing the inevitable crash… 

No, things aren't different here…


On an related note (sort of) I get monthly offers to increase my credit lines, credit card limits, etc, etc… they're just feeding this credit bubble… seems like cannibalism to me…


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