If you're renting in London, Ontario and working toward your first home, there's a program most buyers in the area still don't know about. The City of London's Home Ownership Down Payment Assistance Program (HDAP) offers up to $25,000 as an interest-free loan toward your down payment. It doesn't need to be repaid for 20 years, and if you stay in the home, it's forgiven entirely.
This post explains exactly how the program works, who qualifies, what the repayment rules look like, and how to combine it with other first-time buyer programs to put together the strongest possible down payment.
As of April 5, 2026, HDAP applications require a 2025 Notice of Assessment (NOA) from the Canada Revenue Agency to verify income. Make sure your 2025 tax return has been filed and your NOA is available before starting the application process.
What Is the HDAP?
The Home Ownership Down Payment Assistance Program is administered by the City of London. It provides a one-time interest-free loan of up to $25,000 to help qualifying first-time buyers bridge the gap between their saved down payment and what they need to purchase a home in London.
The loan is registered as a second charge on the property. You make no monthly payments and pay no interest. If you sell or transfer ownership before the 20-year mark, you repay the original loan amount plus 5% of any capital gains realized on the sale. If you remain in the home for 20 years, the loan is fully forgiven.
Up to $25,000, interest-free, forgiven at 20 years. For renters in London, this is one of the most practical down payment tools available.
Who Qualifies
The program has specific eligibility requirements. All of the following must apply:
- You are currently renting in the City of London or Middlesex County
- You have not owned a home in the past three years (or ever, in some assessments)
- Your gross household income is under $95,000 (single applicant) or $115,000 (two or more applicants)
- Your household liquid assets are below $100,000
- The purchase price of the home is $500,000 or less
- The property will be your principal residence
- You are pre-approved for a first mortgage from an institutional lender
The income and asset thresholds are assessed at the time of application. If you're close to any of these limits, timing matters. A mortgage agent can help you understand how your current financial picture lines up before you apply.
How Repayment Works
This is the part buyers most often misread. The HDAP loan isn't simply forgiven if you sell before 20 years. Here's what the repayment structure looks like:
| Scenario | What You Repay |
|---|---|
| You sell or transfer ownership before 20 years | Original loan amount + 5% of capital gains on the sale |
| You refinance the property | The City must be notified; the second charge remains registered |
| You remain in the home for 20 years | Loan is fully forgiven, nothing to repay |
The 5% of capital gains calculation applies to the difference between your original purchase price and the eventual sale price. For example, if you bought at $450,000 with HDAP and sold at $600,000, the capital gain is $150,000. You'd repay the original $25,000 loan plus 5% of $150,000 (or $7,500) for a total repayment of $32,500.
If you're planning to refinance down the road, flag the HDAP second charge with your mortgage agent early. It doesn't prevent refinancing, but it adds a step and the City needs to be part of any discharge or position change conversation.
Stacking HDAP With Other First-Time Buyer Programs
The HDAP works alongside federal and provincial first-time buyer programs. Used together, these can substantially reduce how much of your own savings you need upfront.
| Program | Maximum Benefit | How It Works |
|---|---|---|
| City of London HDAP | $25,000 | Interest-free second mortgage, forgiven at 20 years if you stay in the home |
| Ontario Land Transfer Tax Rebate | Up to $4,000 | Tax rebate for first-time buyers in Ontario; applied at closing |
| First Home Savings Account (FHSA) | Up to $40,000 lifetime | Tax-deductible contributions, tax-free withdrawals for a first home purchase |
| Home Buyers' Plan (HBP) | Up to $35,000 per person | Withdraw from your RRSP tax-free; must be repaid over 15 years |
| First-Time Home Buyers' Tax Credit | $1,500 tax credit | Federal non-refundable tax credit claimed on your tax return the year you buy |
Not every program will apply in every situation. The HBP requires existing RRSP savings. The FHSA requires you to have opened and contributed to one. Your mortgage agent can help you map which combination makes sense for your timeline and tax situation.
Buying in London and want to use HDAP?
Book a free call. I'll help you understand which programs you qualify for, how to stack them, and what mortgage you can carry after all assistance is factored in.
Book a Discovery CallHow to Apply for the HDAP
The HDAP application is handled directly through the City of London's Housing team. Here's the general process:
- Get pre-approved for your first mortgage. You need a confirmed mortgage pre-approval before HDAP will process your application. The City wants to see you're a qualified buyer before they commit the funds.
- Gather your documents. You'll need proof of current tenancy (lease or landlord letter), income confirmation, your 2025 NOA from CRA, bank statements showing liquid assets, and your signed Agreement of Purchase and Sale once you have one.
- Submit your application to the City of London Housing division. Processing times vary. Apply as early in your home search as possible, not after you have an accepted offer.
- Receive conditional approval. The City issues approval subject to the final purchase details. Your real estate lawyer handles the second charge registration at closing.
Timing is the most common issue buyers run into. HDAP funds are subject to program availability, and approvals take time. Don't assume you can apply mid-offer negotiation and have funds ready for closing. Start the conversation early.
Documents to Have Ready Before You Apply
- Proof of current tenancy in London or Middlesex County (signed lease or letter from landlord)
- 2025 Notice of Assessment from CRA for all applicants
- Recent pay stubs or income verification (last 3 months)
- Bank statements showing liquid assets (last 90 days)
- Confirmation of mortgage pre-approval from your lender or broker
- Photo ID for all applicants on title
Once you have an accepted offer, your real estate lawyer will need to work with City housing staff to ensure the HDAP second charge is properly registered at closing alongside your first mortgage. Make sure your lawyer knows about the HDAP from day one.
For more on why your legal representation matters during any purchase or financing transaction, see my post on why a lawyer matters when dealing with mortgage documents in Ontario.
Frequently Asked Questions
Does owning a home in the past disqualify me from HDAP?
Generally, yes. The HDAP is for first-time buyers who have not owned a residential property in the past three years. In some cases the program looks at whether you've ever owned, depending on how the current household composition is assessed. If you're not sure whether your past ownership affects eligibility, ask the City's housing office directly before investing time in the application.
Is there a deadline to apply or is this an ongoing program?
The HDAP operates as a funded program through the City of London. Availability depends on annual budget allocations, and funding can run out mid-year. There is no fixed annual deadline, but there's no guarantee funds will be available when you're ready. Apply as early in your purchase timeline as possible. Waiting until you have a signed offer can cost you a spot in the queue.
How is household income calculated for the program?
Household income includes the gross annual income of all adults who will be living in the home and listed on the application, whether or not they're all on title. Employment income, self-employment income, pension, rental income, and government benefits are typically included. The income is assessed using your most recent NOA from CRA, which as of April 2026 means your 2025 filing.
What if I plan to rent out a room after purchasing?
The HDAP requires the property to be your principal residence. Renting out a portion of the home (a room or basement suite) generally doesn't disqualify you, but the City will want to confirm the home is primarily owner-occupied. If rental income is part of your plan, be upfront about it on your application. Using a secondary suite to help qualify for the mortgage is a different conversation than flipping the property to a full rental.
How is the 5% capital gains repayment calculated if I sell before 20 years?
The capital gain is calculated as the difference between your original purchase price and the net sale proceeds. The HDAP requires repayment of the original loan amount plus 5% of that gain. For example, on a $450,000 purchase with a $575,000 sale, the gain is $125,000. You'd repay the original $25,000 loan plus $6,250 (5% of $125,000) for a total of $31,250. This is handled through your real estate lawyer at closing.
What types of properties are eligible?
The HDAP applies to residential properties within the City of London at a purchase price of $500,000 or less. This includes freehold homes, townhouses, and condominiums. The property must be your principal residence. Vacant land, cottages, and investment properties don't qualify. If you're buying a home with a secondary suite already in place, that's typically acceptable as long as you live in the primary unit.
Do I have to use a specific realtor or mortgage agent to qualify?
No. The HDAP has no requirement to work with specific real estate professionals. You choose your own realtor and mortgage agent. That said, working with a mortgage agent who has placed London buyers before will help you structure the first mortgage and the HDAP second charge in a way that closes without issues. The coordination between your mortgage approval, the HDAP application, and your real estate lawyer needs to happen smoothly.
How long does HDAP approval take?
Processing times vary by volume and time of year, but plan for several weeks minimum. The City reviews your application, confirms eligibility, and issues conditional approval before you reach closing. This is why starting the process before you have a signed offer makes sense. If you're mid-offer negotiation with a 30-day closing and you haven't applied yet, HDAP may not be feasible for that transaction.
Can I use the HDAP alongside my FHSA and Home Buyers' Plan at the same time?
Yes. The programs are designed to stack. Your FHSA and HBP withdrawals contribute to your down payment from personal savings. The HDAP adds a second-mortgage contribution from the City of London. Your first mortgage covers the remainder. All three can be used on the same transaction. Your mortgage agent handles the first mortgage structure; the City registers the HDAP second charge; and you report your FHSA and HBP withdrawals on your tax return. There's no conflict between them.