There are several programs available in Ontario and across Canada to help make homeownership more accessible, especially for first-time buyers. These are offered at the federal and provincial levels, and in some cases, by specific municipalities.
Federal programs available in Ontario
First Home Savings Account (FHSA): This registered plan allows first-time homebuyers to save up to $40,000 tax-free for a down payment.
How it works: Contributions are tax-deductible, and qualifying withdrawals for a first home are non-taxable.
Contribution limits: You can contribute up to $8,000 per year, with a lifetime maximum of $40,000.
Benefit for couples: Spouses or common-law partners can each open an FHSA, effectively doubling the tax-free savings for a household to $80,000.
Home Buyers' Plan (HBP): This program allows first-time buyers to withdraw up to $60,000 tax-free from their Registered Retirement Savings Plan (RRSP) for a down payment.
How it works: The withdrawn amount must be repaid to your RRSP over a maximum of 15 years, starting in the fifth year after the withdrawal for those who withdrew between 2022 and 2025.
Benefit for couples: A couple can withdraw up to $120,000 in total ($60,000 each).
First-Time Home Buyers' Tax Credit (HBTC): You can claim a non-refundable income tax credit of up to $1,500 on your federal income tax return to help with closing costs, such as legal fees and inspections.
Ontario and municipal programs
Land Transfer Tax (LTT) Rebate (Provincial): Ontario offers first-time buyers a rebate on the provincial LTT of up to $4,000. This can eliminate the tax entirely for homes priced at $368,000 or less.
Land Transfer Tax (LTT) Rebate (Toronto): If you are purchasing a home in Toronto, you can receive an additional municipal LTT rebate of up to $4,475.
Affordable Homeownership Programs (Municipal): Many Ontario municipalities offer down payment assistance to low-to-moderate-income residents. These programs vary by city and county.
Stratford: The city offers down payment assistance loans of up to 5% of the purchase price, forgivable after 20 years.
Simcoe County: Qualified buyers can receive a down payment loan of up to 10% of the home's value, forgivable after 20 years.
Lanark County: Residents who rent in the county and meet income requirements can receive a forgivable loan for a down payment.
Renfrew County: The county offers down payment assistance in the form of a forgivable loan to eligible low-to-moderate-income renter households.
Private shared equity programs: Private companies like Ourboro and Lotly offer shared equity programs, where they contribute a percentage of the home's down payment in exchange for a share of the home's future appreciation.
How it works: This can allow buyers to secure an uninsured mortgage by increasing their total down payment to 20%. When you sell, you repay the initial investment plus an agreed-upon percentage of the appreciation.
How to get started
Assess your eligibility: Check the specific requirements for each program, as they often have limits on income and the maximum home price.
Save for your down payment: Use an FHSA and/or the HBP to maximize your savings for a down payment.
Contact your municipality: For local down payment assistance programs, find your municipal government's website to learn about their specific offerings and eligibility rules.
Speak with a professional: Consult a mortgage broker or financial advisor to determine the best programs for your situation.
Shared equity homeownership: Click Here
Private Down Payment Assistance Options:
A private company offers home co-ownership, where they co-invest in your home by contributing 5% up to 15% of your home's purchase price as a down payment, up to a maximum of $250,000. Your ownership share is based on your percentage of the down payment contributed. If you make a 5% down payment and The private company makes a 15% down payment, then you would have a 25% share of your home's appreciation.
Currently, this program is only available for homes located within the Greater Toronto Area (GTA) and parts of Southwestern Ontario, such as Hamilton and London.
And currently available in:
Toronto
Peel Region
York Region
Halton Region
Durham Region
Dufferin County
Simcoe County
Guelph
Kitchener-Waterloo
London
Hamilton
From completing an application to closing on a home, co-buying with the private company, can take 2-4 months. Much of this time is taken up by the mortgage pre-approval and home search process, which would be the same for any traditional homebuyer.
The minimum down payment that you’re required to contribute is 5% of the home’s purchase price.
You’ll also need to fully cover all closing costs, except land transfer tax.
In the case of land transfer tax, the amount you’ll have to pay is split according to your stake in the home.
the private company works with Equitable Bank and Community Trust as their mortgage lending partners.
You will need to use one of the private company lender partners through their third-party mortgage broker.
the private company requires you to pay them back within 30 years.
However, you can always choose to buy out the private company share at any time. This means buying out the private company share at market value.
Charitable Programs
In Ontario, charitable and non-profit homeownership programs can help low-to-moderate-income families buy their first home through financial assistance and educational support. The most prominent programs include Habitat for Humanity and various municipal Affordable Homeownership Programs.
National and province-wide programs
Habitat for Humanity Canada
Habitat for Humanity is a well-known charity that partners with working families to build or buy homes with an affordable, interest-free mortgage.
How it works: Prospective homeowners must demonstrate a need for housing, be willing to partner with Habitat by contributing 500 hours of "sweat equity" (volunteer time), and have an income that falls within a specific range.
How to apply: The application process is handled through local Habitat for Humanity affiliates. You must first contact the affiliate in your area to determine eligibility and learn about information sessions and application periods.
BlackNorth Initiative (BNI) Homeownership Bridge Program
This program helps working Black families become homeowners, with a focus on addressing systemic barriers.
How it works: The program uses a two-mortgage model with no down payment required. The BNI provides a "silent second mortgage" to cover the difference between the purchase price and the amount from a conventional lender. Families also complete 500 volunteer hours and participate in homeowner education.
Eligibility: You must be a Black Canadian citizen or permanent resident, be a first-time homebuyer, and have a gross household income of $65,000 or more.
How to apply: Applications are made through the BlackNorth Initiative website.
Ontario Aboriginal Housing Services (OAHS)
The OAHS delivers housing programs to Indigenous people both on and off-reserve in Ontario.
How it works: Depending on your location and specific needs, they can connect you with appropriate affordable housing or homeownership programs, which may include shared equity models.
How to apply: Contact the OAHS directly for details on available programs and eligibility requirements.
Municipal and regional programs
Many municipalities and counties in Ontario offer their own affordable homeownership programs, typically providing forgivable loans for down payment assistance. These programs are often funded through provincial and federal initiatives.
County of Renfrew: Provides down payment assistance to low-to-moderate-income renter households in the form of a 20-year forgivable loan.
City of Stratford: Offers down payment assistance to qualifying residents.
Simcoe County: Provides down payment assistance of 10% on an affordable home, also through a 20-year forgivable loan.
City of Toronto: The Affordable Home Ownership Program in Toronto offers down payment assistance loans up to 10% for first-time homebuyers with modest incomes.
How to apply for municipal programs:
The application process and eligibility criteria vary by location. The best way to find out what is available in your community is to:
Search online for "[Your City/County] Affordable Homeownership Program."
Contact your municipal housing services department.
Tips for finding the right program
Consider your needs: Some programs focus on specific demographics, like the BlackNorth Initiative or Ontario Aboriginal Housing Services, while others serve the general population.
Review eligibility: Pay close attention to the income thresholds, asset limits, and residency requirements, as they can differ between programs and municipalities.
Connect with a local contact: Non-profits like Habitat for Humanity and government-run programs have local offices that can provide direct assistance and detailed information on their application process.
Options for homes:
"Options for homes" can refer to a non-profit organization like Options for Homes that helps people achieve homeownership by providing down payment support and financial literacy, or it can mean a real estate option contract, a legal agreement giving a potential buyer the right, but not the obligation, to purchase a property at a set price within a specific time.
Options for Homes (the non-profit):
Mission: To help people become homeowners through the Options Ready Program.
Services: Offers down payment support, financial literacy programs, and access to shared equity down payments.
Qualifications: You must be able to qualify for a mortgage from a Canadian bank or credit union and make a minimum down payment.
Real Estate Option Contracts:
Definition: A contract between a seller (optionor) and a buyer (optionee).
Buyer's Right: The buyer pays a non-refundable fee for the exclusive right to buy a property at a set price within a specific period.
Buyer's Choice: The buyer can decide to buy or walk away from the property without obligation.
Seller's Obligation: The seller cannot sell the property to anyone else during the option period and is obligated to sell to the buyer if they choose to buy.
Purpose: Gives the buyer time for due diligence, securing funds, or waiting for market conditions to improve.
Use Cases: Commonly used by investors for future projects, but also by retail buyers.