'It's a slap in the face': Applicants frustrated with P.E.I.'s rent-to-own home program
After just months, many applicants say they were denied. Even some who were approved struggled to find a home
Only a few months into a P.E.I. government program meant to help Islanders buy their first home, many housing hopefuls who applied say they've been denied.
The government's rent-to-own pilot program set aside $17.5 million to help first-time buyers who aren't eligible for a mortgage.
The program came at a time when high interest rates and home prices often financing out of reach for many families.
But so far, according to the province, P.E.I. has processed 107 applications for the rent-to-own program and 73 were declined. Just 34 were pre-approved or conditionally pre-approved.
Under the pilot program, eligible Islanders can apply to have the government buy a home they want to purchase but can't afford; the province would then rent it to them, putting a portion of their lease toward paying the mortgage, and giving tenants the option of buying it after five years.
But some applicants to the program tell CBC the initiative has left them frustrated, either because they were denied, or because they were approved but still struggled to find a suitable property under the arrangement.
Isaiah Henderson and his wife said they worked hard to earn a decent income, to save up, and try to buy their own home. But in the current economic climate, getting a mortgage was still out of reach.
So the province approved the Hendersons recently under the rent-to-own program, allowing them to select a home valued at up to a maximum $300,000. Finding anywhere suitable that price has been tough, he said.
"It just doesn't really work with the housing prices the way they are now," he said. "I'm so happy we got approved but … looking at what we were approved for and the houses available, it's kind of a slap in the face."
The fact the Hendersons were pre-approved at all puts them in the minority of applicants to the program, according to the province.
To be eligible, Islanders must have a good credit rating with no outstanding debt obligations on file in the province's Central Default Registry. In addition, their total annual household income must be $100,000 or less.
Amanda Mahar of Miscouche wasn't approved, even though she thought she met all of the program's criteria.
"My credit cards are all paid up, my [credit] score is well above where it needs to be," she told CBC. "The bank had said I'm a perfect candidate for a mortgage, it's just my income level wasn't quite high enough for the amount I needed.
"It seemed like a great idea, but [government doesn't] really seem to be implementing it."
Aryan Sehgal, a realtor with Royal LePage, said he's heard similar frustrations about the program from many would-be clients on the Island.
He said the program maximum of $350,000 for a home purchase doesn't go very far, especially in Charlottetown's real estate market.
"I feel like the program needs to lessen the strictness," Sehgal said. "The niche that it's targeting is very different than what it says it's targeting.
"Rent prices in P.E.I. are skyrocket high, so when people are paying that much in rent, they question why they can't pay that in equity towards a house."
Eligibility criteria standard and necessary: province
The P.E.I. Department of Economic Development, Innovation and Trade, which administers the rent-to-own pilot initiative, said it holds Islanders to similar standards as if they were applying for funding through a traditional lender.
Gilles Arsenault, the minister responsible for the program, said the qualifying criteria are necessary.
"We want to make sure people experience success in becoming a homeowner in the next five years," he said, "so we do have criteria we've put in place to make sure people are successful."
The rent-to-own pilot will wrap up at the end of November, or once its budget has been spent.
Arsenault said the province will decide then whether to continue the program, and if anything needs to change with how it works.
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With files from Steve Bruce