Is BC's first time home buyer grant being used to facilitate CMHC Insurance fraud?

For the past two posts we have been talking about Quadra Homes and their promotional pamphlet for their Langley Condo Development.

Quadra made the news for their unauthorized usage of the BC government's logo when hawking their condo's. The story was headlined in the Vancouver Province newspaper: Major developer was reprimanded over unauthorized use of provincial logo to help sell condos.

But as we asked yesterday, what about counselling buyers to circumvent the new regulations against zero down payments?

House buyers needing 95% financing are not allowed to borrow the last 5% for their down payment. If they do their loans won’t be eligible for CMHC mortgage insurance.

Is the Langley brochure counselling and assisting buyers to do something illegal?

It's an important question because it's not just Quadra Homes engaging in this practice.

One of the contributors to our comments section (hat tip Ray) passes on a similar tactic being used by Aragon Properties at their FLO and DUO developments in New Westminster.

Prospective clients recently received this email blast:

The email clearly promotes a "Zero Down Payment Program" and says:

- 95% insured mortgage financing
- 5% down payment loan with flexible terms
- Offer effective until March 31, 2013

It certainly looks like Aragon Properties is leveraging the BC first time home buyer grant like Quadra was... with one significant difference.

Instead of suggesting you find a generous uncle to spot you the $10,000 down payment until the grant arrives (at which time you pay him back), Aragon says they are offering to loan you the money you need for the down payment themselves.

Perhaps instead of pursuing the unauthorized use of provincial logos to help sell condos, the government should be looking at what appears to be widespread illegal use of the first time home buyer grant to circumvent CMHC mortgage insurance regulations?

Just a thought.

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