Steinbach, Manitoba has introduced a new home buying model that is making homeownership something of a reality for people who were previously priced out of the market. Under the program, homebuyers can secure their homes with a one percent down payment, which was a concept that was brought to life by local realtor Waldo Neustaedter two decades ago.
“I was down in Florida, and I toured a Habitat for Humanity little town site… they had built a little community there of 110 homes, roughly,” Neustaedter told CTV News. “It was a dream of mine to get people into homes. People were having such a difficult time getting to and saving up for a down payment.”
Through a partnership with a local construction company, Three Way Builders, and Steinbach Credit Union, they set forth and in 2017, construction began.
“We’ve got four single-family models to choose from, and they’re all from around 1,018 square feet to 1,040 square feet,” Neustaedter said. They’re finished on the main level only. ICF basements and then the lower level is ready for future development if they like, with three bedrooms upstairs.”
Over 500 homes have been built between the Lexington Village neighbourhood in Steinbach and another neighbourhood in Kleefeld, Manitoba, about 16 kilometres southeast of Steinbach, proving that the model is both scalable and expandable across Canada. Mitchell, Manitoba is up next with 223 more homes planned under the same program.
“People get vetted and they have to have jobs and be able to make the payment,” said Neustaedter, noting that every homeowner in the program has made their payments as expected. The loans function similarly to traditional mortgages, with the major difference being that Neustaedter backs the program financially, which gives buyers the ability to avoid costly mortgage insurance, typically required on down payments of under 20 percent.
The newer neighbourhoods feature mixed housing stock including townhouses, duplexes, and single-family detached homes, and prices range from $290,000 to $329,000 depending on size and style, though the homes are priced at eight percent below appraised value. “It really gets people into a home and into ownership when they otherwise wouldn’t have the means to do so,” said Neustaedter.
