A loan for your down payment
It’s a loan you pay back, not a grant. It can lend you up to 5% of the purchase price of your home, to a maximum of $17,500, and it’s for the down payment only. It can’t be used for closing costs or other costs.
The province describes the loan as “conditionally interest free”. Interest builds up on it, and that interest is forgiven once you’ve paid the loan back in full. If payments are missed and the loan goes into default, the loan and all the interest that has built up become due.
The loan is secured with a second mortgage on your home, which means it’s registered against your home behind your main mortgage.
Who it’s for
The program has limits on income and on the price of the home, plus a few other conditions. In the province’s terms:
- Your total annual household income is $110,000 or less.
- The purchase price of the home is $350,000 or less.
- You’re a first-time buyer. That means you’ve never bought a home, or you haven’t lived in a home that you or your current spouse or partner owned in the last four years, or your marriage or common-law relationship has ended.
- You’re a Canadian citizen or a permanent resident.
- The home is on PEI and will be your main home, lived in by you as a single-family home with no part of it rented out. Rentals, cottages and recreational properties don’t qualify.
- Without the program, you couldn’t put down 5% of the purchase price, and you qualify for an insured mortgage, which is a mortgage covered by default insurance that protects the lender.
- Your credit is satisfactory, and you have no unpaid debt in default on the province’s Central Default Registry.
If any of these aren’t clear, I’m happy to explain what they mean. Finance PEI decides who’s eligible, so it can give you a yes or no on your own situation.
How you apply
You apply to Finance PEI directly, either online or by filling in the program’s PDF form and sending it to Finance PEI. If you have a spouse or partner, Finance PEI expects them to apply with you.
With your application, Finance PEI asks for:
- Last year’s Notice of Assessment for each person applying, which is the statement the Canada Revenue Agency sends you about your tax return
- Two pieces of government ID, one with your photo and signature
- A letter from your employer confirming your job
Finance PEI only processes complete applications, and its application page has the full list of what it needs.
Finance PEI, 94 Euston Street, 2nd floor, Charlottetown · 902-368-6200 · financepei@gov.pe.ca
Finance PEI’s application page, on the Government of PEI website
Where I fit in
Finance PEI runs the program and makes the decision on every application. The application on this site is for your mortgage, not for the program.
I don’t want surprises, and neither do you. If you’re thinking about the program, I’m happy to talk through how it sits alongside your mortgage, as many times as it takes.
