London's down payment assistance program: how it works, who qualifies, and why more Ontario cities should copy it

For most renters in London, the hardest part of buying a first home is not the monthly payment. It is the down payment. The City of London runs a program that tackles exactly that problem, and in my opinion it is one of the few housing programs in Ontario that actually moves a family from renting to owning. Here is how it works, what the numbers look like in today's market, and why I think other Ontario cities should be paying attention.

What the program offers

The Homeownership Down Payment Assistance Program gives eligible renters an interest free loan of up to 5% of the purchase price, to a maximum of $25,000, on a home priced at $500,000 or less in London or Middlesex County. There are no monthly payments. If you stay in the home as your primary residence for 20 years, the loan is forgiven entirely.

If you sell or move out before the 20 years are up, you repay the original amount plus 5% of any capital gain. If you sell at a loss in an arm's length sale at fair market value, the City can waive the repayment. You can also repay early at any time without interest.

The program is funded by the Government of Canada, the Province of Ontario and the City of London through the Ontario Priorities Housing Initiative. It relaunched on October 29, 2025, and the 2026 intake closed on October 9, 2026. The City says it expects to reopen on April 1, 2027, first come first served until the funding is used up.

Who qualifies

• You rent now in London or Middlesex County, from a landlord you are not related to. Past ownership is fine as long as you are renting today.
• Nobody in the household owns residential property anywhere, including a cottage or a share of one. A spouse who owns property disqualifies the application.
• Income and assets: the City's page lists a maximum gross household income of $113,700, counting everyone 18 and over, and household liquid assets of no more than $100,000. The limits have been adjusted since the launch, so check the current figure when the program reopens.
• A mortgage approval from a recognized lender, with mortgage insurance. With 5% down, that means a CMHC, Sagen or Canada Guaranty insured mortgage, which is how most buyers in this program end up financing anyway.
• You cover closing costs yourself: legal fees, land transfer tax, registration and the home inspection.
• You live in the home for the length of the agreement and do not rent it out, not even a room.

Detached, semi detached, townhouse, row and condo apartment homes all qualify, new or resale, as long as the home is modest in size for the neighbourhood. Every resale home needs an inspection, paid by the buyer, before the money is released.

What $500,000 actually buys in London right now

A few years ago a $500,000 cap would have ruled out almost everything. Not any more. LSTAR's September 2026 numbers put the composite benchmark price for London and St. Thomas at $552,500, down about 26% from the February 2022 peak of $749,000. The townhouse benchmark is $421,500, the apartment benchmark is $317,100 and one storey homes sit at $541,300, so a tidy bungalow or an older two storey that needs some work is within reach under the cap. With 5.9 months of inventory it is a buyers' market, and buyers have time to negotiate.

On a $500,000 home, 5% down is $25,000, which is exactly the minimum down payment an insured mortgage requires on a home at that price. In other words, the program can cover the entire minimum down payment for a family that has the income to carry a mortgage but has not been able to save a lump sum while paying London rents.

My take: London is the test market, and it has worked

London ran an earlier version of this program from 2008 to 2013. City staff reported to council that it issued 270 loans worth about $2.3 million and later collected more than $2.4 million in repayments. That is not a subsidy that disappeared. It is a revolving fund that paid for itself and is now helping the next group of buyers. Staff said the relaunch had about $3.1 million available, enough for roughly 124 households. In a city this size that is a small number, and applications closed again in early October. Demand is clearly there.

Lenders are comfortable with it too, in my experience. The buyer still qualifies for an insured mortgage the normal way, the City's loan has no monthly payment competing with the mortgage, and a buyer who starts with real equity is a safer borrower. Everybody in the transaction is better off.

A handful of Ontario counties and regions run something similar, including Simcoe County, Kingston and Frontenac, Chatham Kent and Niagara, but most Ontario renters live somewhere without a program like this. I think that should change. The structure is simple, the forgiveness period rewards people who stay and put down roots, and the capital gains clause means taxpayers share in the upside if someone flips the house. If a mid sized city like London can run it on a revolving fund, larger cities can too. Ottawa and Queen's Park have put a lot of effort into supply. This is one of the few tools aimed squarely at the people who need help most: working families trying to buy their first starter home.

If you plan to apply in April

• Get your paperwork and mortgage approval ready before April 1. You will need your 2025 notice of assessment, recent pay stubs or an employment letter, a bank verification of income and assets, your current lease and proof of residence in Canada. Complete applications are decided in about five business days, first come first served.
• Shop under the cap, not at it. At $480,000 the assistance is $24,000 and you keep a little room for closing costs and the inspection.
• Budget for the touch ups. Homes under $500,000 in London are often older. Set aside money for what the inspection finds: a bathroom refresh, flooring, paint, or a basement that needs finishing. Get a quote before you waive conditions, not after.
• Remember the 20 year clock. Renovation costs cannot be deducted from the capital gain the City shares in if you sell early, so improve the home to live in it, not to flip it.
• Stack the other first time buyer tools. The FHSA ($8,000 a year, $40,000 lifetime), the Home Buyers' Plan ($60,000 from your RRSP) and the Ontario land transfer tax refund (up to $4,000) all work alongside the City's program.

If you are a renter in London or Middlesex County thinking about buying next spring, this program is worth a serious look. And if the home you can afford needs a little work to feel like yours, that is where we come in.