DPAP - PEI's Unique Down Payment Assistance Program

What is DPAP?

DPAP stands for the Down Payment Assistance Program, a significant initiative designed to support first-time homebuyers in Prince Edward Island (PEI) who dream of owning a home but face challenges accumulating the necessary down payment. This program is aimed at making homeownership more accessible and affordable for eligible residents by offering financial assistance for the down payment required to purchase a home. By reducing the upfront financial burden, DPAP plays a crucial role in helping individuals and families achieve their homeownership goals.

Available Funding Through DPAI

  • Loan Amount: Qualified individuals may receive a conditionally interest-free loan of up to 5% of the home's purchase price, with a maximum of $17,500.

Loan Usage and Terms

  • Specific Use: Loan funds are dedicated to the home's down payment and cannot cover financing, closing, or other related expenses.
  • Interest Rate: Loans carry a fixed interest rate of 5% per annum, accruing over the loan period but forgiven upon full repayment of the principal.
  • Repayment Flexibility: Initial payments focus on the principal. A failure to meet repayment obligations results in the immediate due of the full loan amount and accrued interest. Participants can defer payments in the first year to manage unexpected costs.

Eligibility Criteria

To apply for this initiative, applicants must meet the following conditions:

  • Status: Must be a Canadian Citizen or Permanent Resident.
  • First-Time Buyer: Have never owned a home, haven't lived in a home owned by you or your spouse/partner in the last 4 years, or are separated from a marriage or common-law partnership.
  • Income and Purchase Price Limits: Annual household income under $100,000 and home purchase price not exceeding $350,000.
  • Location: The property must be in Prince Edward Island.
  • Financial Need: Lack the means to afford a 5% down payment without this program's assistance.

Additional Requirements

  • Applicants should possess a satisfactory credit rating without any defaulted outstanding debts in the Prince Edward Island Central Default Registry.
  • The purchased property must be the principal residence and occupied by the owner as a single-family dwelling. Rental, seasonal, or recreational properties are ineligible.

Application Process

Eligible candidates can apply through two methods:

  1. Online Application: Submit through the program's website.
  2. Downloadable Form: Complete and sign the Down Payment Assistance Program application, accompanied by:
    • Last year's Notice of Assessment from the CRA for all applicants.
    • Two pieces of government-issued ID, including one with a photo and signature (requirements vary for Canadian Citizens and Permanent Residents).
    • Employment verification letter stating date of hire, position, salary, and employment status.

Securing Your First Home

Once you've successfully qualified for the program, you'll need to provide additional documents, including the approval of your first insured mortgage from a recognized lender and the purchase agreement for your chosen home. Following the submission of your application, a member of the Finance PEI team will reach out to you. They will discuss your application in detail, clarify any questions, and guide you through the subsequent steps to verify your eligibility.