Down Payment Assistance Program
The Down Payment Assistance Program (DPAP) is a pilot program to assist qualified residents of Prince Edward Island, who have modest incomes, in purchasing a first home.
How much financing is available under this program?
Eligible applicants can apply to receive a conditionally interest free loan of up to five per cent of the purchase price of a home, to a maximum loan of $11,250.
The loan proceeds must go toward the down payment for the home and cannot be used for financing, closing or other costs.
The loan will bear interest at the fixed rate of 5 per cent per annum, which will accrue and accumulate during the term of the loan and will be forgiven when the loan principal has been repaid in full.
Payments during the term of the loan will be applied to loan principal, but should the program participant default on their repayment obligations under their loan, the unpaid loan principal and accumulated accrued interest will become due in full.
Participants may opt to waive their payments for the first year of the loan, to allow the new home owners to adjust to any unforeseen costs.
Am I eligible to apply?
In order to be eligible for assistance, the following criteria must be met:
- at least one applicant is a Canadian citizen;
- applicant is a first-time home buyer;
- applicant’s total household income is $80,000 or less;
- purchase price of the home may not exceed $225,000;
- property is on Prince Edward Island; and
- applicant does not have the financial ability to pay 5 per cent of the purchase price without assistance of the program
Are there other requirements for this program?
As an applicant, you must be pre-approved for an insured mortgage by a recognized financial institution.
The applicant will have a satisfactory credit rating and must not have any defaulted outstanding debt obligation on file in the Government of Prince Edward Island Central Default Registry.
The purchased property must be the applicant’s principal residence; rental properties, seasonal and recreational properties are not eligible. A mobile home is eligible provided it is permanently affixed to a property owned by the applicant.
How do I apply?
As an eligible applicant, you must complete and submit the Down Payment Assistance Program application form, along with the following supporting information:
- A Notice of Assessment from the Canada Revenue Agency (CRA), or a Proof of Income Statement (Option “C” Print Report) from CRA for the prior tax year from each applicant
- A signed declaration showing that the Applicant(s) have no previous home ownership and do not have the financial ability to pay 5% of the purchase price without the assistance of the program (Please note that a Commissioner of Oaths is available at Finance PEI and can sign your declaration free of charge)
- A copy of the Applicant’s Birth Certificate, or Passport, evidencing Canadian citizenship
- A written verification of employment confirming your date of hire, position, annual income for 2018, employment status: Full Time, Part Time, Casual, Seasonal, Term and the probability for future or continued employment.
Should you be deemed eligible for the program, the following information will be required to finalize program financing in due course:
- A copy of the Applicant’s final Approval for first insured mortgage financing, from a recognized financial institution
- A copy of the Applicant’s Agreement of Purchase and Sale for the program eligible home being purchased
What happens after I apply?
After you apply for the program, a staff person of Finance PEI will contact you to discuss your application and the next steps to determine eligibility.
For more information:
It is recommended that first time home buyers review the Canada Mortgage and Housing Corporation (CMHC) educational materials listed in the RESOURCES section of this page.
If you have any further questions, contact:
Bruce Johnston, Senior Financial Analyst
94 Euston Street, 2nd Floor
PO Box 1176
Phone: (902) 894-0379
Fax: (902) 368-6255