Manitoba town introduces 1% home down payment program

Alex Karpa examines Steinbach, Manitoba’s one per cent down home buying model and if other parts of Canada could benefit from it.

STEINBACH, Man. — For Nelgun Romero, owning a home once felt far out of reach.

He moved from the Philippines to Ontario in 2021. With housing prices and the cost-of-living skyrocketing in Canada, he didn’t know what his future would look like.

“Buying a house, nowadays, is like a dream because it’s very expensive,” he said.

That changed in 2024, when a friend told him about a one per cent down payment program in Steinbach, Man., about 63 kilometres southwest of Winnipeg.

After researching the opportunity, Romero and his family decided to take the leap. In 2025, they moved into their new home, putting just one per cent down.

“It’s very beneficial for us because not everyone has money in the bank to buy a house,” he said. “It was $4,000 for the down payment, and then $11,000 for lawyer fees, so it was only $15,000.”

“It’s very helpful,” he said.

Romero’s home is in a new neighbourhood known as Lexington Village, a growing neighbourhood in Steinbach’s southwest corner, which is filled with buyers who used the same one per cent down payment program.

It was developed by Steinbach realtor Waldo Neustaedter, who came up with the concept nearly two decades ago.

“I was down in Florida, and I toured a Habitat for Humanity little town site, which they had built a little community there of 110 homes, roughly about there and, and I told my wife, this is what I want to do,” he said.

“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.”

He partnered with local construction company Three Way Builders and Steinbach Credit Union to create these homes.

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,” he 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.”

Neustaedter says, they have built over 500 homes between the Lexington Village neighbourhood in Steinbach, and another neighbourhood in Kleefeld, Man., about 16 km southeast of Steinbach.

Expanding into other communities

The project is now expanding to Mitchell, Man., about five km east of Steinbach, where 223 more homes are planned under the same program.

Sales launched recently, with Neustaedter saying early demand is already strong.

“People get vetted and they have to have jobs and be able to make the payment,” he said.

At this time, Neustaedter says every homeowner in the program has made their payments.

The loans function similarly to traditional mortgages, but with a key difference – Neustaedter provides financial backing, allowing buyers to avoid costly mortgage insurance typically required for down payments under 20 per cent.

“In some cases, think of it almost like what a family member or a parent might do for some people. They’ll step in and guarantee loans or those sorts of things. This developer’s willing to do that for people and it allows us, as the credit union or bank, to actually be able to put forward the mortgage,” said Steinbach Credit Union CEO Curtis Wennberg.

The newer neighbourhoods have mixed housing, including townhouses, duplexes, and single-family detached houses.

The prices of the homes range between $290,000 all the way up to $329,000, depending on the size and type of home.

The homes are also priced at eight per cent below appraised value.

“It really gets people into a home and into ownership when they otherwise wouldn’t have the means to do so,” he said.

Housing provides options for newcomers

Emily Schott says one of the biggest challenges for newcomers is housing.

She says this one per cent down payment program is an affordable option for them.

“It opens up the door to even have a house, period,” said Schott, who is the program coordinator at Eastman Immigrant Services. “A lot of people don’t have that opportunity. They need to rent out and use their money for other means, so this enables them to live in a safe neighbourhood.”

She added that smaller communities can offer strong opportunities for immigrants, even if most initially gravitate toward towards larger cities.

Scheme to promote affordable housing is ‘great’

Housing expert Carolyn Whitzman says low down payment programs can help, but they need careful design to remain sustainable.

“The only way for it to work over time, because you can’t just keep on pouring money until everybody has attained home ownership, is to make sure that you’re not selling it on the open market again,” Whitzman said, who is the senior housing researcher at the University of Toronto School Cities.

Whitzman says Whistler, B.C. is a good example of how it utilizes affordable housing, where about 50 per cent of the homes are provided by the municipality.

“A lot of it’s home ownership. It’s set at below market price, so you pay less, but when you sell it, you sell it back to the authority at whatever you paid, plus inflation,” she said.

Whitzman notes that home ownership is now far less affordable than it should be for middle-class Canadians and is unlikely to become cheaper soon.

While she supports innovative approaches, she says they must be carefully evaluated and scaled to have a meaningful impact.

“I’d love to see innovation happening in terms of making ownership more affordable, but as I say, it would need to be evaluated and it would need to be scaled up in order to make a meaningful difference,” she said.