SOMBA K'E/YELLOWKNIFE - Joanna Maguire wants to purchase a home in Yellowknife but after trying to buy a house with the assistance of the NWT Housing Corporation three times, she says she's decided it will be easier to move to Alberta where housing prices are cheaper.

Joanna Maguire wanted to buy a house in Old Town last fall but her purchase offer wasn't approved by the NWT Housing Corporation, even though the corporation had previously approved a $70,000 remissable loan. She's pictured here with her daughter, Juliet, 6. - Elizabeth McMillan/NNSL photo

Maguire said the housing corporation approved her for a $70,000 loan to buy a home last fall but it rejected the offer she wanted to make claiming the home was too expensive.

"You think, 'Wow, they're going to give me this remissable loan. I live here anyway, I can pay it off.' They tell you you have assistance, but you don't really have assistance," she said. "I told my daughter I was buying that house; it was really sad."

The NWT Housing Corporation has a program for first-time home buyers that allows people to apply for a forgivable loan to buy a "modest home." The size of the loan depends on a person's income and family size. They must meet certain requirements, including being a resident for three years and taking financial literacy courses offered by the corporation.

The Housing Corporation's letter, signed by district director Andy Tereposky, notifying Maguire she could receive $70,000 in assistance, didn't say how much the home should cost. It did advise her not to sign an agreement of purchase and sale until she spoke with a program advisor.

Maguire proceeded to find a small, four-bedroom house she hoped would be a starter home. With the help of a realtor and a lawyer, she made an offer of purchase for $392,000 that was approved by two banks. With an income of more than $70,000 per year, Maguire said she had secured a low interest mortgage and would able to afford the monthly payments and bills.

She then went to the Housing Corporation for a final stamp of approval. That's when Maguire ran into problems.

After numerous meetings and e-mails, the Housing Corporation turned down Maguire's offer.

The reasoning a manager gave Maguire was that the home she wanted to buy was too expensive. The program recommended she purchase a home for $258,000. She said this wasn't communicated until they were in the process of rejecting her offer.

Maguire said she could afford this amount even without the loan but for that price, she would only be able to purchase a walk-up apartment or a trailer in Northland Trailer Park.

"I didn't think they'd want to ghettoize me into a place that's going to have problems," Maguire said.

She said the program doesn't take into consideration the tight housing market.

"It doesn't work in this community because we're a market community where people bid (against each other) on houses. And it's really driving up prices for lower-end accommodation," she said. "They really wasted my time and my bank's time and my realtor's time."

Maguire had applied for the program twice before. Once she was denied assistance because she'd been attending school in Calgary and the second time she was approved for $50,000. To receive the funding, she needed to make an offer within 90 days – and she ran out of time after she lost a bid on a property she wanted to buy.

Stephen Pretty, manager of strategic planning and communications with the Housing Corporation, said clients are encouraged not to buy homes they can't afford.

He said people need to demonstrate they're not putting more than 30 per cent of their income toward shelter. He said people would likely not be approved for a house that cost more than $400,000.

"The banks will approve you very often for mortgages you can't afford," he said. "It's a bit of oversight on our end to make sure those folks aren't putting themselves in a situation where things are unaffordable."

Pretty didn't have numbers on how much people use the program each year or how many people get approved, but he said not many people use the program in Yellowknife because there aren't enough homes that are affordable.

Pretty said there will be a review of the program this summer to determine how effective and accessible the program is. He said that review will consider the income levels the housing corporation is using in relation to the market prices.

"We're not really in a position to keep up with the market ... we're more duty-bound as a government entity and a public service to ensure we're not assisting or placing people into situations where they can't afford their housing." Maguire isn't the only person running into roadblocks with the program.

"They're dangling the funding in front of us and then taking it away," said another woman, who said she and her husband have applied twice and still don't have a house. The first time their application wasn't accepted because it wasn't complete. She said they weren't aware they were missing a document until the loan was turned down. "They didn't even bother to phone us," she said.

She asked not to be named because she is applying again this year.

The couple was approved for a loan last fall (she didn't want to specify how much it was for) and found a trailer they wanted to buy. When they went to discuss an offer with their program officer, the property fell within the price range recommended by the Housing Corporation -- $277,000, but their total household expenses did not.

Their program officer told them their truck payments were too expensive. He said they'd have a better chance if they refinanced the 2007 truck. The woman felt that it was an infringement that their project officer wanted to see their vehicle contract but they tried to comply anyway.

"We were desperate to get a home," she said.

The woman said they lost approximately $9,000 when they traded it in at the dealership but their payments were $220 less a month. That still wasn't enough. Now the couple doesn't have a house, or a truck.

"I don't know why they advertise the program when they don't do what they say," she said. "We thought we might own our own home this year but that's not going to happen."

John Gon, who is self employed, said he's applied for the program every year for five years but has been turned down four times. The only time he was approved, he didn't qualify for a bank loan because his debt load was too high. When he paid off debts and sold off his vehicle, the Housing Corporation told him his income was too high. He said he was frustrated with how difficult the process is.

"They don't reveal information up front about how you qualify," he said. "They're more of a stumbling block." Gon said the price of the trailer he wanted to buy five years ago has gone up in price so much that it's unaffordable, but he's still hoping to buy a home, with or without the Housing Corporation's loan assistance.

Six months later, Maguire is still upset about what happened and the stress the application process caused.

"How dare they give me a letter saying I have $70,000 to buy a house and then they take it all away," she said.

Despite being a longtime Yellowknifer, she said she has applied for jobs down south where the housing market is much cheaper.

"It's hard to go and buy a house after thinking I had a $70,000 grant," she said. "How could I apply again? Honestly it's so stressful. I can't believe they treated me like this."