As outlined in an article published earlier this month, BC Housing's AHOP program was created to help moderate-income households bridge the gap between renting and buying a home through down payment assistance and lower monthly mortgage payments.
Building on the success of a pilot program that launched in 2017 with downtown Victoria’s Vivid at the Yates condominium – a 135-suite, 20-storey tower completed earlier this year – BC Housing is assisting future homeowners through AHOP at a Fernwood development known as Haven.
Haven, from Chard Development, will rise along the 1100-block of Johnson Street just east of Cook Street with 104 residences in studio, one, two and three-bedroom layouts priced from the low $300,000s.
Envisioned specifically within the context of AHOP, Haven’s condominiums have drawn a significant amount of interest among individuals ready to make the leap into homeownership, although struggling to satisfy down payment requirements to secure a mortgage.
“The AHOP program has been one of the most comprehensive affordable homeownership initiatives in Victoria, and given the high cost of delivering new housing on the south Island, financial assistance in the form of a down payment boost from BC Housing has piqued a lot of interest from buyers of all ages,” said Heather Harley, Vice President of Marketing and Communications at Chard Development.
BC Housing’s AHOP program matches a purchaser’s 10% down payment with an additional 10%, allowing the purchaser to apply for a mortgage as though a 20% down payment has been secured. This additional down payment can make the difference between a would-be buyer qualifying for a mortgage, or having to delay homeownership in order to amass more funds. A 20% down payment also frees the purchaser from paying Canada Mortgage & Housing Corporation (CMHC) insurance premiums, which help with the mortgage qualification process by further lowering the monthly mortgage cost.
In order to qualify, buyers must reside in BC and cannot currently own real-estate anywhere in the world. Their household income must fall below a threshold set by BC Housing based on the 75th income percentile for BC households. This means that to purchase a studio or one-bedroom home, a household must earn below $118,440 per year. For larger suites, like two and three-bedroom homes, household income may not exceed $168,310 per year.
Victoria resident Darek Mioduszewski is one of Haven’s newest pre-sale purchasers. Prior to learning about the AHOP program and its availability at Haven, Mioduszewski had begun losing faith in his pursuit of homeownership, particularly with the run-up in real-estate valuations the Capital saw throughout 2020 and 2021.
“Buying a home in Victoria felt completely out of reach for me, and the feeling of defeat was often on my mind,” Mioduszewski, who works for BC Transit as a transit bus operator, remarked. “I kept hearing of so many people being unable to afford a home in the city, and how millennials in particular were disproportionately shut out of the housing market.”
The 31-year-old says he had spent several years saving for a down payment and had approached multiple mortgage brokers to assess his qualification status. Each time he would learn he fell short of his mortgage affordability threshold as housing prices kept rising.
“Despite what had been going on with the market, a family member had encouraged me to start down the road towards buying a home even though I knew it would be a long shot. I regularly met with mortgage brokers to go through the pre-qualification process, hoping changes to rates or first-time buyer incentives would make a difference,” Mioduszewski said.
“I knew where I had to be to make it all come together, but it remained a challenge to save a large enough down payment despite my wages rising. I also knew that even if I were able to qualify, my monthly cash flow could be strained to cover my mortgage obligations.”
Eventually Mioduszewski, like many younger buyers, had resolved himself to remaining a renter and re-assessing his homebuying scenario in several years. But then, he says, opportunity knocked.
“One day I see this ad for Haven, with its 10% down payment matching program through BC Housing. I talked to my family about it, and they encouraged me to reach out to learn more. Within several days I had an arranged meeting with the sales team who helped me file my application paperwork for AHOP, and I’d started the mortgage pre-qualification process with the Haven mortgage specialists at the Royal Bank.”
|A rendering of Chard Development's Haven condominium nearing construction on Johnson Street east of Cook Street. The six-storey, 104-suite project was designed with BC Housing's "AHOP" affordable home ownership program in mind. Chard Development|
Mioduszewski admits he had mixed emotions about this go-round, but he would soon learn the mortgage application he had just submitted would change his life.
“I received a phone call from the bank, and they said under the AHOP program I qualified to purchase my unit. I couldn’t believe it, it all felt so surreal.”
Mioduszewski’s pre-sale selection was priced in the mid-$300,000s. Through AHOP’s down payment match of 10%, his monthly mortgage payments will be several hundred dollars lower than they would be with only the 10% down payment he had saved up, and there is no added cost of a CMHC insurance premium. The mortgage specialist at Royal Bank told Mioduszewski his qualification was made possible by this reduced mortgage carrying cost and no CMHC insurance.
“It is important for me to let others know that if I could do it, so can other people who are in my situation working hard to catch up but always falling behind,” Mioduszewski said. “My message now to my friends and colleagues is to learn about this program and see how it can help them, too.”
Chard Development says Mioduszewki’s story is a common one for purchasers at Haven and would-be buyers working through the AHOP process.
“The 10% down payment assistance is a game changer for individuals who have been saving for a down payment, but ultimately end up chasing the market as costs rise,” Harley said. “Working with BC Housing, we recognized that Haven could play a role in assisting would-be buyers with entering the housing market, and these efforts are having a profound impact.”
Harley notes several common questions shared by visitors to Haven’s presentation centre focus on BC Housing’s 10% equity stake when it comes time to sell the home, and what restrictions are in place following occupancy.
With respect to a home sale, the developer says AHOP’s rules require the purchaser to pay back BC Housing their 10% equity stake based on the value of the home at the time of sale. At Chard’s Haven project, BC Housing’s equity will be re-allocated to the City of Victoria’s Housing Reserve Fund for affordable housing initiatives as a way for buyers to ‘pay it forward’ after getting a leg-up through the program.
For example, if after two years of homeownership, a purchaser sells a home originally purchased for $350,000 for an increased value of $385,000, the repayment to BC Housing would be $38,500. Under AHOP’s rules, a purchaser must repay BC Housing if they sell their home, choose to rent it out within the first five years of ownership, or after 25 years. Purchasers can also choose to repay BC Housing at any time. Upon repayment or after five years, home owners are free to rent their homes.
The pre-sale process is also a respite from the fast-paced re-sale segment of the real-estate market known for its bidding wars and a tight supply that favours unconditional offers. AHOP’s partnership with pre-sale offerings is designed to mitigate those pressures by giving would-be purchasers choice, time to make an informed decision, and up-front pricing.
Harley, however, says the fundamental benefit of an affordable home ownership program with a matched down payment is access to one of the most desirable real-estate markets in Canada for a larger pool of buyers.
“The reality is, housing costs in Victoria are high. Working with BC Housing, we are taking steps to assist individuals with transitioning from renting a home to owning a home. Programs like AHOP are a leading way to help British Columbians achieve their homeownership goals, regardless of their age, and whether or not they may have owned real-estate in the past,” Harley says. “And with equity re-payments remaining in the local community through the City of Victoria’s Affordable Housing Fund, the program is a positive housing investment in more ways than one.”
To learn more about Haven and how to qualify for a condominium purchase under the AHOP program, connect with Chard Development by calling 250-590-9940, or visit the project website here. C
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