It’s no secret that buying a home — even a condo — is becoming farther out of reach for many Canadians, especially those living in the country’s largest cities. In collaboration with the City of Toronto, one developer is hoping to give some new construction buyers a leg up thanks to a recently-launched financial assistance program.
Mississauga-based developer Vandyk Properties recently announced its Vandyk Start Program, which offers support to first-time buyers at their master-planned Grand Central Mimico project with the help of interest-free and payment-free loans from the City of Toronto. The Grand Central Mimico, which is sold out, is spread out over four city blocks with 1.85 million square feet of residential living space near the Mimico GO station.
“The Vandyk Start Program was designed in partnership with the City of Toronto to really address one of the largest barriers people entering the housing market face, which is the financial strain and large sums of money for payments that are unrealistic for many,” said Andrea Wong, Vandyk Properties’ vice president of marketing, in a statement to Livabl. “It’s that extra boost financially to become a homeowner that really helps out, as well as the extended timeline to financially plan for the payments.”
As pre-construction purchases tend to require a significant deposit upfront and additional installments over a short duration, Wong explained that the Vandyk Start Program works to alleviate these challenges. The program reduces the upfront deposit amount required, extends the deposit payment structure and provides interest-free, payment-free loans funded by the City.
“We recognized that Toronto’s housing market is extremely competitive, and that first-time home buyers especially, face significant challenges entering the market,” said Wong. “Factors including low inventory and high prices make it seemingly impossible to purchase, which is when we started to think strategically about our role as a developer in helping curve some of these challenges.”
Vandyk Properties is the facilitator of the program, and works together with the city to create guidelines for the program’s qualifications. First-time purchasers would be eligible for the Vandyk Start Program depending on a number of factors, including their residency status and total household income. For instance, participants cannot have a total annual income more than $82,286 in a single-person household, or $103,635 in income for a two- or more person household, or a single-parent family. The candidate must also not own a home yet in Canada, and is required to use the Vandyk property as their sole and principal residence.
Once qualified, the purchaser works with a Vandyk sales representative to select from a roster of 37 eligible Grand Central Mimico suites. The units range from studio to three-bedroom-plus-den layouts, and are priced from $549,900 to $891,900. As pre-construction homes can be very competitive to purchase, Wong explained that these units were set aside so that buyers can have a better chance at homeownership.
“We strategically selected a variety of suite types from studios to three beds plus den to ensure that we were offering a range of living styles that catered to all demographics,” said Wong. “In collaboration with the City of Toronto, a variety of suite types are well suited for different lifestyles and price points.”
A 10 per cent deposit is required upfront for the Vandyk units, which is smaller than the standard 20 per cent deposit needed for a market-priced condo. The deposit can be paid in installments over 540 days, equivalent to 18 months. The interest-free and payment-free loan would be applied as a “silent mortgage,” amount upon closing on the property, which is provided by the City of Toronto.
Wong told Livabl that the loan amount will be equivalent to the actual development charge set out by the City of Toronto based on unit type. One-bedroom suites would be entitled to $33,000 in support and $51,000 for two- and three-bedroom suites, reducing the total mortgage amount. The loan amount is subject to increase and will be adjusted at closing.
In a statement to Livabl, the City of Toronto’s executive director of the Housing Secretariat, Abi Bond, said through the planning approvals process, Toronto City Council provided development charges deferrals under the Home Ownership Assistance Program (HOAP) for Vandyk’s Grand Central Mimico development, which is located at 23 Buckingham Avenue.
“Through the City’s program, 37 down-payment assistance loans will help make homes at 23 Buckingham Avenue more affordable to qualifying low- to moderate-income families and individuals,” said Bond. When asked to define low- to -moderate income families, Livabl was directed by the City to low-income cut-off data provided by Statistics Canada.
If the Vandyk home is sold or it is no longer used as a primary residence, owners are required to repay the full loan along with the proportionate Capital Appreciation Amount, according to information from Vandyk Properties. For instance, if the home was bought for $500,000, the loan is $33,000 — 6.6 per cent of the cost — and later sold for $600,000, the Capital Appreciation Amount would be valued at $6,600, 6.6 per cent of the increase in value of $100,000.
In the few weeks that the program has been active, Wong says that they’ve received an “overwhelming number of applications,” from potential buyers and positive feedback. Wong said that with the Vandyk Start Program being so new, the developer is currently focused on its success, and will be assessing the program’s results to gauge replicating this offering in future Vandyk communities.
“By working together and listening to stakeholders we’re able to reach agreements and plan future-forward communities that address issues such as supply, particularly around transit nodes across the city,” she said.
