Overcoming the Down Payment Burden: A New Way to Help Canadians Become Homeowners

This blog was provided by Greater Vancouver Realtors

Canada’s housing crisis is not for lack of ideas. It is the complexity of the problem that stalls action, and we are well past the point where any single solution can turn the tide. That means we need multiple strategies that can work in concert. But more importantly, we need the private, public, and not-for-profit sectors to work together.

At Greater Vancouver REALTORS® (GVR), we represent over 15,000 real estate professionals who are on the front lines of the housing crisis. We see young professionals with good incomes and solid credit unable to move beyond renting, not because they cannot handle a mortgage, but because they are unable to get over the down payment hurdle.

Think about the impact when teachers, first responders, tradespeople, and healthcare workers are unable to afford to live where they work. It is not just a personal issue for them. It is a systemic one for the communities that rely on their services.

That is why we are proposing a new approach: a Canadian Home Ownership Community Bond.

A New Kind of Social Investment

The idea is simple. It is a national bond program that allows Canadians, individuals, and corporations alike, to invest in a housing fund. This creates a mutual benefit – investors receive a modest return, while the pooled funds help qualified buyers enter the housing market by easing the size of their required down payments.

Here is how it could work:

1. Investors – Canadian residents and corporations could invest in the bond, using additional tax deferral room granted by the federal government for this purpose.
2. Investment management – Funds would be managed by a trusted entity, such as the Canada Mortgage and Housing Corporation or a federally regulated bank. 
3. Homebuyer support – The accumulated investments would act as “collective equity,” reducing the down payment required for qualifying buyers, lowering risks for lenders, and increasing home ownership access. 
4. Social and financial impact – Investors would receive a return while supporting a program designed to help make home ownership attainable for more Canadians. 

Under this concept, lenders would be able to draw from the bond in the unlikely event that a buyer goes into default. I say unlikely because history shows that Canadians pay their mortgages. Mortgage delinquencies in Canada are historically around 0.2 per cent and slightly below that in B.C. This track record should inspire confidence for the program’s underwriters. 

We Have Done This Before

This kind of investment model is not new to Canada. During the First World War, Victory Bonds allowed Canadians to invest in the country’s future. More recently, Canada Savings Bonds served a similar purpose until 2017. The housing crisis demands a similar kind of big picture thinking.

This would also signal to younger generations that we are not leaving them behind. That we see the value in helping them build equity, stability, and a future in their communities.

We Can Build It Together

GVR cannot do this alone. That is why we are reaching out to beyond our industry colleagues – business leaders, lenders, and policy thinkers – to help refine and champion this idea.

The market challenges are real. But so is our ability to innovate when we work together. The Canadian Home Ownership Community Bond could be one more way to support the next generation of homeowners and the communities that need them.

We also urge our next federal government, whoever that may be, to consider this idea.

To be clear: we understand this is not a silver bullet. But it is one more tool we could use to help make a difference in this crisis.