New CMHC program good for students, middle class, says P.E.I. mortgage broker

A mortgage broker on P.E.I. says a federal initiative that could see Canada's housing agency contribute up to 10 per cent of the price of a buyer's first home is good news, especially for people with student debt and the middle class.

Paul Trainor said it's a good first step, but more needs to be done.

"I think it's going to be a positive," he said in an interview on CBC News: Compass. "I think there are some things we need to do to make housing affordable. The flip side of that is getting the housing products into P.E.I."

Under the First Time Home Buyer Incentive program, which was announced in March and will officially launch in September, a first-time homebuyer who earns less than $120,000 can qualify.

The Canada Mortgage and Housing Corporation would kick in up to 10 per cent of the purchase price of the home, providing the borrower comes up with the minimum amount for an insured mortgage, which is now at five per cent.

Trainor said it won't solve the problem or soaring home prices, but it will help make those homes more affordable.

"This will help with the mortgage payments so that person in the middle class, the guy that's making $50,000-$60,000 a year or less can get into a home and be able to afford it," he said.

He said it will also help people, such as new graduates with student loans and other debt, bring their total debt servicing range down to a more acceptable level for a mortgage.

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