The FTHBI promises to help make real estate more affordable, but there’s a big catch: It’s a loan you have to repay with a share in your home’s growth in value.

The federal government launched a new national program on September 2, 2019, that it says will help thousands of families across the country buy their first home. Aptly named the First-Time Home Buyer Incentive (FTHBI), the program offers eligible buyers up to 10% of a home’s purchase price to put toward their down payment, thus lowering mortgage carrying costs and making home ownership more affordable.

But before you put your real estate agent on speed dial and start browsing the MLS listings, there are a few things you should know about the FTHBI. First, you might not qualify, since the program is limited to a specific subset of first-time homebuyers. Second, the Incentive is not free money, but a form of loan from the Government of Canada which will eventually need to be paid back, possibly at a large premium. 

The specifics of the FTHBI are a bit complicated, so we’ve broken down the main points to help you figure out whether you can access it and, more importantly, what the potential pitfalls could be if you do.