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Pag-Ibig Fund

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Category: Social Issues

Autor: reviewessays 16 March 2011

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HISTORY

The Home Development Mutual Fund (HDMF) was created on June 11,1978 by virtue of Presidential Decree No. 1530. Primarily, the Fund was created to address two of the nation's basic concerns: generation of savings and provision of shelter for the workers. Under PD 1530, two agencies administered the Fund. The Social Security Systems (SSS) handled the funds of private employees while Government Service Insurance System (GSIS) handled the funds of government workers.

On March 1, 1979, Executive Order No. 527 took effect, transferring the administration of the Fund to the National Home Mortgage Finance Corporation (NHMFC). The NHMFC is one of the operating agencies of the then Ministry of Human Settlements.

To further strengthen the stability and viability of the two funds, Executive Order No.538 was issued on June 4, 1979 merging the two funds into what is now known as the Pag-IBIG Fund.

On December 14, 1980, Presidential Decree 1530 was amended by PD 1752, making the Pag-IBIG Fund a corporation independent from the NHMFC. The Fund's rule-making power was vested in the Board of Trustees. PD 1752 likewise made Pag-IBIG membership mandatory for all SSS and GSIS member-employees.

Months after the assumption to power of former President Corazon C. Aquino, Pag-IBIG contributions were suspended from May to July 1986. However, on August 1, 1986, Pres. Aquino "directed" the resumption of Pag-IBIG membership under Executive Order No. 35. Membership was still on a mandatory basis but under more liberal terms. For one, contribution rate was reduced from three percent to one percent for employees earning over P1, 500. Employer share was likewise cut from three percent to a fixed rate of two percent. The Maximum Fund Salary was raised from P 3,000 to P 5,000.

January 1, 1987 marked the return of the Pag-IBIG Fund to a voluntary program under Executive Order No. 90. The next eight years witnessed the growth of the Pag-IBIG Fund as a voluntary Fund.

On June 17, 1994, President Fidel V. Ramos signed Republic Act 7742, which reverts the nature of Pag-IBIG membership to mandatory. The new Law became effective on January 1, 1995.

Pag-IBIG is an acronym which stands for Pagtutulungan sa Kinabukasan: Ikaw, Bangko, Industria at Gobyerno. In effect, Pag-IBIG harnesses these four sectors of our society to provide its members with adequate housing through as effective savings scheme.

PAG-IBIG FUND OFFICERS

BOARD OF TRUSTEES

Hon. Vice-President Noli De Castro

CHAIRMAN

Housing and Urban Development Coordinating Council

Hon. U/Sec. Roberto Tan

VICE CHAIRMAN

Representing Sec. Margarito B. Teves

Department of Finance

Hon. U/Sec. Mario L. Relampagos

Rep. Sec. Romulo L. Neri

Dept. of Budget & Management Hon. Zorayda Amelia C. Alonzo

Rep. Sec. Peter B. Favila

Dept. of Trade & Industry Hon. Romero FS. Quimbo

President/CEO

Home Development Mutual Fund Hon. U/Sec. Manuel G. Imson

Rep. Sec. Patricia A.

Sto. Tomas

Dept. of Labor & Employment

Hon. Alexander Hilario G. Aguilar

Private Employees Representative Hon. Jose Luis L. Vera

Private Employees Representative Hon. Rosemarie Adjawie

Gov't. Employees Representative

Hon. Teresita M. Alegre

Private Employers Representative Hon. Lili B. Ramirez

Private Employers Representative

WHO CAN BE MEMBER OF PAG-IBIG FUND?

Mandatory

With the signing of Republic Act No. 7742 all SSS and GSIS members earning P4,000 and above monthly are mandatory covered by Pag-IBIG fund.

Voluntary

Membership to the fund is also open to:

• Private and government workers earning less than P 4,000 a month but who wish to join anyway;

• Self-Employed workers such as professionals and businessmen;

• Overseas contract workers (OCW);

• Residents and immigrants in the United Staes and Canada;

• Informal income group such as cooperative members;

• Non-working spouses.

HOW MUCH IS THE MONTHLY CONTRIBUTION?

For employees with monthly compensation (Basic+COLA) of P1,500 and less, an amount equivalent to one percent (1%) of their monthly compensation, and two percent (2%) of the monthly compensation of employees earning over P1,500.

2. Over P1,500 , an amount equivalent to two percent (2%) of the monthly compensation of each covered employee.

Employers are mandated to match their employees' monthly contributions with an amount equivalent to two percent (2%) of the monthly compensation of each covered employee. For self-employed members, monthly contribution is equivalent to two percent(2%) of their monthly gross earnings.

Under the Pag-IBIG Overseas Program (POP) ,OFWs with monthly compensation of:

• US $1,000 or less shall contribute US$20 or its peso equivalent monthly.

• Over US $1,000 , monthly contribution of US $40 or its peso equivalent.

• C$1,500 or less, monthly contribution of US $40 or its peso equivalent.

• Over C$1,500 a month. monthly contribution of C$60 or its peso equivalent.

WHAT ARE THE BENEFITS OF PAG-IBIG MEMBERSHIP?

The Fund offers its members the following benefits:

5. savings

6. short term loan

7. Housing loan

WHAT IS THE PAG-IBIG PROVIDENT SAVINGS PROGRAM?

The Pag-IBIG provident savings program is a fast, easy and affordable way of saving for a member's future needs.

WHAT ARE THE SPECIAL FEATURES OF PAG-IBIG SAVINGS PROGRAM?

Pag-IBIG savings enjoy the following features:

• double or triple your money benefit

• tax-free dividend earnings

• portability of savings

• government-guaranteed

WHEN CAN A MEMBER WITHDRAW HIS SAVINGS?

Withdrawal of Pag-IBIG savings is allowed upon occurrence of any of the following :

• Membership maturity after 20 years

• A member who signs up under RA 7742 (Pag-IBIG Universal Coverage Law) shall be allowed partial withdrawal after 10 or 15 years of continuous membership, provided he has no outstanding housing loan with the Fund.

• Retirement

• at age 45 (early retirement plan)

• at age 60 (optional retirement)

• at age 65 (mandatory retirement)

• Permanent departure from the country.

• Permanent total physical disability/insanity.

• Termination from service by reason of health.

• Death of the member

-in case of the member's death, the Fund provides the legal heirs an additional P6,000 death benefit grant (DBG).

WHAT IS MULTI-PURPOSE LOAN?

The Multi Purpose Loan (MPL) Program provides immediate assistance to Pag-IBIG members who have made at least 24 monthly membership contributions which they can use to finance medical, educational, livelihood, minor home improvement, purchase of appliance and furniture, and other related need.

Under the program, up t to 60 percent of the member's total savings is extended, with interest rate pegged at 10.75 percent per annum. MPLs may be renewed upon payment of at least six(6) amortizations.

WHAT IS THE HOUSING LOAN PROGRAM? (CIRC. 213)

The Housing Loan Program extends assistance to individual borrowers to finance any or a combination of the following:

• Purchase of a fully developed lot not exceeding one thousand (1,000) square meters which should be within a residential area;

• Purchase of a lot and construction of a house thereon.

• Purchase of a residential house and lot, townhouse or condominium unit, inclusive of a parking slot, which may be:

-old or brand new;

-a property mortgaged with the Fund; or

-an acquired asset which is disposed of through sealed public bidding, negotiated sale or Rent to Own program

• Construction or completion of a residential unit in a lot owned by the member;

• Home improvement;

• Refinancing of an existing mortgage loan with an institution acceptable to the Fund, provided that:

- the loan to be refinanced is current and updated at the time of loan application;

and

- the account reflects a perfect repayment history for at least two years, as supported by the borrower's official receipts

• Combination of loan purposes shall be limited to the following:

-Purchase of a fully developed lot not exceeding 1,000 sq.m. and construction of a residential unit thereon

-Purchase of a residential unit, whether old or new, with home improvement;

-Refinancing of an existing mortgage with home improvement or

-Refinancing of an existing mortgage, specifically a lot loan with construction of a residential unit thereon.

WHO ARE ELIGIBLE TO BORROW?

• Must be a member under the Pag-IBIG I or Pag-IBIG II program for at least 24 months as evidenced by the remittance of at least 24 monthly contributions at the time of loan application:

• Must be a member under the Pag-IBIG Overseas Program (POP) for at least two years

• A member under Pag-IBIG I & II or the POP shall be allowed to make a lump sum payment equivalent to the required number of monthly contributions to satisfy this requirement;

• Under the Pag-IBIG Overseas Program (POP), must have remitted an amount equivalent to his savings for at least 12 months.

• Must not be more than 65 years old at loan maturity and must be insurable;

• Must have the legal capacity to acquire and encumber real property;

• Must have passed satisfactory background/credit and employment/business checks of the developer and the Fund;

• Had no Pag-IBIG housing loan that was foreclosed, cancelled, bought back or subjected to "dacion en pago"

• Must have no outstanding Pag-IBIG housing loan, either as a principal borrower or co-borrower; and

• Has no outstanding Pag-IBIG multi-purpose loan in arrears at the time of loan application. A member whose multi-purpose loan is in arrears shall be required to pay his arrears over the counter to update his account.

HOW DOES ONE AVAIL OF A PAG-IBG HOUSING LOAN ?

1. Attend a Loan Counseling session at the Pag-IBIG Office concerned

Accomplish a Preliminary Loan Counseling Questionnaire, Husing Loan Application (HLA) and Membership Status Verification Slip. If eligible, secure checklist of requirements.

2. Submit HLA with complete requirements. Pay a processing fee of P1,000.00 (non-refundable)

3. Receive Notice of Approval/Letter of Guaranty and sign loan documents.

4. Proceed to BIR and present Deed of Absolute Sale (DOAS) between owner of the property and applicant for payment of documentary stamps and capital gains tax.

5. Proceed to Registry of Deeds (RD) for payment of transfer of tax and registration fees for the transfer of title.

6. Proceed to Notary Public for notarization of LMA and annotation of mortgage with the Registry of Deeds (RD) and to Assessor's Office to secure new tax declaration in the name of the applicant.

7. Secure Occupancy Permit from the Local Government Unit's (LGU) Engineering Office for Purchase of new Residential Unit (PRU), Purchase of Lot and Construction of a New Residential Unit (PLCH) and Construction of House (CH) loan purposes.

8. Submit the following documents to Pag-IBIG office concerned:

• Original Transfer Certificate of Title in the name of the applicant with annotated mortgage

• DOAS with original RD stamp

• New Tax Declaration in the name of the applicant

• Updated Real Estate Tax Receipt (house and lot, if applicable)

• Occupancy Permit

• Assignment of Loan Proceeds

9. Release of loan proceeds

10. Start monthly amortization on the month immediately following loan take-out/final loan release.

WHAT IS MEMBERSHIP MATURITY?

Membership maturity is one of the grounds for withdrawal of the member's provident benefit from Pag-IBIG Fund. It refers to the end of the 20 year-period of membership with Pag-IBIG, when the member has completed 240 monthly contributions.

WHO ARE QUALIFIED TO CLAIM THEIR PROVIDENT SAVINGS DUE TO MEMBERSHIP MATURITY?

All Pag-IBIG members who have completed 20 years of membership, starting from the month that they made their initial contribution, and who have made a total of 240 monthly contributions at the time of maturity may claim their provident savings from Pag-IBIG.

At the same time, members with gaps in their membership due to value suspensions of their contributions are also qualified to withdraw their savings. The valid reasons for suspension are: unemployment due to termination, resignation, suspension, company closure, or health reasons; leave without pay, approved waiver/suspension of Pag-IBIG coverage: and suspension of Pag-IBIG contributions from by Pres. Cory Aquino from May to July 1986.

HOW MUCH WILL A MEMBER RECEIVE?

Each member will receive an amount equivalent to his total personal contributions, employer counterpart shares (if any) and credited dividends.

However, the balance of his loans from Pag-IBIG (if any) shall be deducted from the proceeds of his provident benefit.

WHAT IS THE PROCEDURE IN APPLYING FOR PROVIDENT BENEFITS DUE TO MEMBERSHIP MATURITY?

The procedure is as follows:

1. An employed member shall file his application for provident benefits through his Fund Coordinator or employer upon completing 240 monthly contributions.

Self-employed members may file their applications to the Pag-IBIG office where they remit their monthly contribution; while unemployed members may file their applications to the Pag-IBIG office nearest them.

2. Pag-IBIG shall notify the member when his provident savings benefit is ready for payment.

WHAT ARE THE REQUIREMENTS?

A5: The basic requirements are:

1. Duly accomplished Application for Provident Benefit form (1 copy)

2. Duly accomplished Member's Data Form (MDF), if not yet submitted to Pag-IBIG

3. Service record for employees of the national government

4. Latest payslip for AFP and PNP personnel

Other requirements depending on the reason for gaps in contributions are:

REASON DOCUMENTARY REQUIREMENTS

1. Unemployment due to:

a. Termination a. Notice of termination

b. Resignation b. Approved letter of resignation

c. Suspension c. Notice of Suspension

d. Company Closure d. Certificate from appropriate agency that the company has ceased operations

e. Health reasons e. Medical certificate

2. Leave without pay 2. Approved leave without pay

3. Approved Waiver/suspension of Pag-IBIG coverage 3. Waiver Certificate/Certificate of Employer that the company is waived

4. Suspension of Pag-IBIG contributions for the period May '86-July '86 4. None

HOW LONG IS THE PROCESSING PERIOD?

Pag-IBIG shall process applications for provident benefits which are supported by all the required documents within 22 working days.

HOW SHALL THE MEMBER RECEIVE HIS PROVIDENT BENEFITS DUE TO MEMBERSHIP MATURITY?

A member shall be paid his provident benefits through the Cash Division of the concerned Pag-IBIG branch/regional office or through

the member's employer.

AFTER A MEMBER HAS RECEIVED HIS PROVIDENT BENEFITS DUE TO MEMBERSHIP MATURITY, IS HE REQUIRED TO REGISTER AGAIN WITH PAG-IBIG?

Yes, if the member is still employed as Republic Act 7742 mandates, all members of SSS and GSIS who are earning at least P4,000 a month must register with Pag-IBIG.

After a member shall have claimed his provident benefits, any and all contributions he shall remit to Pag-IBIG thereafter shall constitute his second membership.

Thus, his second membership shall start with the first contribution he remits to Pag-IBIG after he claims his provident savings due to the maturity of his membership.

PROGRAMS AND SERVICES

 PROVIDENT / SAVINGS BENEFIT

The program offers its members a fast, easy and affordable way of saving for their future needs.

PROVIDENT AND SAVINGS PROGRAM

>PURPOSE

The program fulfills one part of the Pag-IBIG Fund's twin mandate, which is the generation of savings and the provision of affordable housing finance. The Provident Savings Program is an easy, fast and affordable savings system for the Filipino workers.

>FEATURES OF THE SAVINGS PROGRAM:

Double or triple your money

Members who are earning P1,500 or below contribute 1% of their monthly basic pay, while those who are earning more than P1,500 contribute 2% of their basic pay. Their employers are mandated to provide a counterpart contribution equivalent to 2% of the employee's monthly basic pay.

Annual dividend earnings

The members' total contributions and his employer counterpart contributions earn annual dividends, which are credited proportionately to the member's total savings. The dividend rate is equivalent to 70% of the Fund's annual net income.

Tax-free dividend earnings

All dividend earnings are tax-free.

Portability of savings

A Pag-IBIG member maintains his/her Pag-IBIG account, with his total accumulated contributions and dividend earnings, regardless if he transfers from the one employer to another, whether from government to the private sector or vise-versa.

Government-guaranteed savings

Pag-IBIG contributions are safeguarded by a guaranteed by the government of the Republic of the Philippines.

>TOTAL ACCUMULATED VALUE (TAV)

The member's Total Accumulated Value or TAV consists of:

 his accumulated personal contributions

 his total employer's counterpart contributions (if applicable)

 dividend earnings credited to the member's account

>RATE OF CONTRIBUTIONS:

 One Percent (1%) of member's monthly compensation, for employees earning not more than P1,500.00 per month

 Two Percent (2%) of member's monthly compensation, for employees earning more than P1,500.00 per month

 Employer's are required to provide 2% counterpart contributions to their qualified employees

For purposes of computing Pag-IBIG contributions, maximum monthly compensation is pegged at not more than P5,000.00. A member has the option to contribute more than the required amount. His employer however, is not required by law to match the increased monthly contributions, and is mandated to contribute only up to 2% of the P5,000 salary ceiling. Again, the employer has the option to match the higher monthly contribution should he desire.

>GROUNDS FOR WITHDRAWAL OF SAVINGS

1. Membership maturity

• Active membership for 20 years i.e., after 240 monthly contributions

• For members registered under RA 7742 (implemented on January 1995) partial withdrawal of savings is allowed after 10 to 15 years of continuous membership, provided the member has no outstanding housing loan.

2. Retirement

• Age 45 (Early retirement)

• Age 60 (Optional retirement)

• Age 65 (Mandatory retirement)

3. Permanent Departure from the Country

4. Permanent /Total Disability

5. Insanity

6. Termination from service due to health reasons

7. Upon death of the member

The legal heirs of the deceased member shall receive the provident benefits of the member. They shall also receive an additional Death Benefit Grant equivalent to the member's Total Accumulated Value or P6,000.00, whichever is lower.

Optional Withdrawal of Pag-IBIG Savings as a Reward to Members Registered under RA 7762 and EO 90

Pag-IBIG Circular No. 205

COVERAGE

These guidelines covering the Optional Withdrawal of Pag-IBIG Savings Program, also known as Kaunlaran Sa Pag-IBIG: Balik-Impok, Ginhawa Kaloob (KASAPI: BIG Ka), is being implemented by Pag-IBIG Fund in recognition of its members who have registered under RA 7742 for their continuous membership with the Fund by giving them the option to withdraw the total accumulated value (TAV) of their contributions after ten (!0) years of continuous service and after having made 120 monthly employer and employee contributions without gaps after the effectivity of R.A. 7742.

Likewise, these guidelines shall cover all members who voluntarily joined the Fund under the provisions of EO 90 and have contributed 120 monthly employer and employee contributions without gaps after the effectivity of R.A. 7742: Provided, that only contributions generated or collected after the effectivity of RA 7742 may be withdrawn. Accordingly, the TAV of the members registered under EO 90 which were generated prior to the effectivity of RA 7742 shall remain with the Fund and shall only be withdrawn upon their membership termination from the Fund. For members registered under Presidential Decree 1752, withdrawal of TAV shall be governed by the rules and regulations on the said PD

ELIGIBILITY

1. A member, including those who registered under EO 90, shall after the effectivity of RA 7742 have the option to withdraw his TAV after 10 years of continuous membership and after having made 120 monthly contributions, inclusive of employee and employer shares. A member who has completed 10 years of membership but has gaps in his monthly employee or employer contributions shall not be allowed to pay his contributions for the lacking months to qualify for withdrawal of savings. One who reactivates his Pag-IBIG membership shall be allowed to claim his savings after completing the required 120 monthly contributions, reckoned from the first month paid after the gaps.

2. For purposes of satisfying the required number of contributions to qualify for optional withdrawal of savings, the period corresponding to the TAV applied to a member's outstanding loan, (i.e. offsetting) prior to availment of the optional withdrawal shall be considered when counting the total number of monthly contributions.

LIMITATIONS OF COVERAGE

The following members, however, are not eligible to withdraw their Pag-IBIG savings under these guidelines:

Members who have outstanding housing loans, whether as a principal or co-borrower, or as a sponsor under HDMF Circular No. 203 or the Housing Loan Guidelines for Pag-IBIG Members Registered under HDMF Circular No. 96 (Membership of Self-Employed Working Groups with Informal Incomes through Cooperatives and Trade Associations);

Members with outstanding short-term loans, unless they fully pay their respective accounts. No offsetting shall be allowed.

PAYMENT OF BENEFITS

1. The amount to be returned to the member shall consist of the following:

• the member's accumulated contributions;

• the employer's counterpart contributions, if applicable; and

• the credited dividends.

2. The TAV to be paid the member shall be computed up to the exact date the member's contributions reach the 120th month. On the other hand, the cut-off date for the computation of the dividend earnings will be the credited annual dividends as of the date when application for provident savings benefit claim is filed. Should a member withdraw his membership contributions in the middle of the year or any day before the last day of the current year, he shall no longer be entitled to receive the dividend benefits for the year as the annual dividend earnings are declared and computed at yearend. The annual dividends shall be based on the actual remittances made. Any subsequent contributions/dividends credited to the TAV of the member shall be considered part of the continuing membership.

PERIOD OF AVAILMENT

A member who is eligible for optional withdrawal after 10 years of continuous membership shall be given one year from the exact date the member reaches his 120th month of continuous contributions for both employee and employer savings to file for claim of his provident savings benefits.

Should a member fail to or opt not to avail of the optional withdrawal within the one-year period provided, he can only withdraw his savings on the 15th year, and after making 180 continuous monthly employee and employer contributions.

OTHER PROVISIONS

1. Optional withdrawal of savings may be exercised only once, and shall not prejudice a member's continuing membership to the Fund.

2. The exercise of the option shall not be considered a ground to terminate one's membership to the Fund. A member shall continue to be covered mandatorily by the Fund, with his employer mandated to deduct and remit the employee's required contribution together with the employer contribution.

LIST OF REQUIREMENTS

Optional Withdrawal of Pag-IBIG Savings due to Membership Maturity under RA 7742

Documentary Requirements

1. Duly accomplished Application for Provident Benefit (APB) Form (1 copy)

2. Duly accomplished Member's Data Form (MDF), if not yet submitted to Pag-IBIG Fund

3. Service Record, for employees of the national government

4. Latest payslip, and Statement of Service for AFP and PNP personnel.

Other Requirements

(depending on the reason for the gaps in contributions)

REASON

DOCUMENTS REQUIRED

1. Unemployment due to:

 Termination

 Notice of Termination

 Resignation

 Resignation letter, duly acknowledged by the employer or Approved Letter of Resignation

 Suspension

 Notice of Suspension

 Company closure

 Certificate from the appropriate agency or LGU that the company has ceased operations

 Health Reasons

 Medical Certificate issued by a duly licensed physician

2. Approved Waiver/Suspension of Pag-IBIG Coverage

 Waiver Certificate/Certification of the employer that the company's membership to the Fund is waived

 PAG-IBIG OVERSEAS PROGRAM

The Pag-IBIG Overseas Program (POP) aims to provide the Filipino overseas workers/immigrants the opportunity to save for their future while giving them the chance to avail of a housing loan as much as P2,000,000.00.

 PAG-IBIG HOUSING BOND

The Pag-IBIG Housing Bonds (Series 2001-1) are bonds issued by the Home Development Mutual Fund to finance its housing loan program. It has a term of five (5) years and one(1) day. The Development Bank of the Philippines (DBP) is the Facility Agent/Trustee Bank.

WHAT ARE PAG-IBIG HOUSING BONDS

Pag-IBIG Housing Bonds (Series 2001-1) are bonds issued by the Home Development Mutual Fund to finance its housing loan program. It has a term of five (5) years and one(1) day. The Development Bank of the Philippines (DBP) is the Facility Agent/Trustee Bank.

WHO CAN INVEST IN THE BOND?

Pag-IBIG / non Pag-IBIG members, Philippine and non Philippine nationals, Developers, Insurance Companies may invest in Pag-IBIG Housing Bonds.

DENOMINATIONS

Denominations of P5,000, P10,000, P50,000, P100,000, P500,000 and P1,000,000 are available to all investors. There is no limit as to the amount of Bonds an investor would like to purchase.

WHAT ARE THE INTEREST RATES OF THE BONDS?

An investor will be paid on a semi-annual basis a fixed interest rate of 8% per annum, which is tax exempt by virtue of the Home Guaranty Corporation (HGC) guarantee. The interest earning shall be automatically credited to the savings or ATM account of the bondholder on record maintained with DBP/ LBP.

SAMPLE COMPUTATION:

Amount Invested

:PhP 5,000.00

Coupon Rate (p.a)

:8.00%

Semi-Annual Interest Earnings

:Php 200.00

Less: Withholding tax (exempt)

:0.00%

Semi-Annual Interest Earnings

: Php 200.00

WHERE AND HOW CAN ONE PURCHASE THE BONDS?

An investor can purchase the bonds from any Pag-IBIG offices nationwide and from the DBP Offices nationwide and accredited banks which will be announced by Pag-IBIG Fund. The following are the requirements:

 Accomplished Application to Purchase Pag-IBIG Housing Bond

 TIN and 2 valid IDs ( with picture and signature )

 Cash or Check payment

For Corporation: copies of SEC registration, Articles of Incorporation and By-Laws, and pertinent Board Resolution authorizing the purchase and indicating the authorized signatories and specimen signatures.

WHAT ARE THE INVESTMENT SECURITY FEATURES OF THE BONDS?

The Home Guaranty Corporation (HGC) provides a cash guaranty on the entire amount of principal and interest of up to 8% p.a. The guaranty of HGC carries with it the unconditional guaranty of the Republic of the Philippines. In addition, a debt repayment fund shall be maintained with the Development Bank of the Philippines.

AFTER THE PUBLIC OFFERING, CAN AN INVESTOR STILL BUY THE BONDS?

Yes. The bonds can be bought at the secondary market through the Development Bank of the Philippines (DBP).

CAN ONE APPLY THE PROCEEDS OF A MEMBER’S SAVINGS TO BUY THE BONDS?

Yes. The maturity value of the savings of the Pag-IBIG member can be used to purchase the bonds. A Pag-IBIG member whose membership matures can request Pag-IBIG Fund to apply the proceeds of his Total Accumulated Value (TAV) or savings to pay for the purchase price of the bonds.

WHAT IS THE PROOF OF OWNERSIP OF THE PAG-IBIG HOUSING BONDS?

An investor will be issued a Pag-IBIG Housing Bond Certificate by the Development Bank of the Philippines (DBP)

CAN AN INVESTOR SELL THE BONDS EVEN BEFORE MATURITY?

Yes. Since the bonds are negotiable, an investor can sell these to other interested investors through the Facility Agent (DBP) even before maturity.

HOW CAN THE BONDS BE REDEEMED UPON MATURITY?

Upon surrender of the bond certificate, the maturity value of the bond shall be paid by DBP to registered bondholders at maturity date through direct credit to the savings or ATM account of the bondholder.

WHAT ARE THE OTHER FEATURES OF THE BOND?

a. Allowable investments of insurance companies;

b. Acceptable collateral for Developer's loan with Pag-IBIG Fund;

c. Acceptable deposit in lieu of a surety bond for Collecting Agents of Pag-IBIG Fund; and

d. For Developer-Investors, the Bonds may be considered as sufficient compliance with Section 18 of Republic Act 7279 subject to the pertinent guidelines.

Sample of Pag-IBIG Housing Bonds Certificate

Eligible bondholders shall be entitled to participate in a semi-annual raffle draw of House and Lot Packages. For every P5,000 Bond held, a bondholder is entitled to one raffle number.

Individual bondholders may avail of a multi-purpose loan and/or housing loan from Pag-IBIG subject to Pag-IBIG loan Guidelines.

Pag-IBIG Fund Corporate Headquarters

Investment Department 4/F Atrium Building, Makati Avenue, Makati City

or call us at:

Tel. Nos. :(632) 848-8262 / 811-4340 / 811-4297 /

811-4258 to 60 / 811-4380

Trunk LIne : (632) 811-4401 to 27 loc 324 / 329

Fax No : (632) 811-4154 / 811-4259

DEVELOPMENT BANK OF THE PHILIPPINES

DBP Trust Services Sen. Gil J. Puyat Avenue, Makati City

Tel. Nos. : (632) 818-4532 / 812-6374 / 812-6377

Trunk Line : (632) 818-9511 loc. 2321 / 2338 or 220

Fax No. : (632) 893-0942

HOME GUARANTY CORPORATION

Guaranty and Credit Insurance Group

374 Sen. Gil J, Puyat Avenue, Makati City

Tel. Nos. : (632) 897-3270 / 897-3216

897-3489 /896-4128

Fax No. : (632) 896-4114

LENDING PROGRAMS

 PROVIDENT LOAN

 MULTIPURPOSE LOAN

The loan may be used for the following purposes:

 Minor Home Improvement

 Livelihood

 Medical

 Educational

 Purchase of appliance and furniture

 Other immediate needs

PAG-IBIG MULTI-PURPOSE LOAN (MPL) PROGRAM

HDMF CIRCULAR NO. 56-H

LOAN PURPOSE

The program provides short-term financial assistance to Pag-IBIG members for the following purposes:

a. minor home improvement

b. livelihood

c. medical

d. education

e. purchase of appliance and furniture

f. other needs

BORROWER ELIGIBILITY

Member must have made at least 24 monthly contributions;

The minimum take home pay requirement of government employees shall be subject to the rules and regulations as provided for in the General Appropriations Act (GAA) while for employees working with the private sector shall be based on their respective company policies, if there is any.

Members with active Fund membership at the time of application with the commitment from both the employee and employer to continuously remit contributions at least for the term of the loan

For members who have withdrawn their membership contributions due to membership maturity, the reckoning date of the updated 24 monthly contributions shall be the first monthly contribution following the month the member qualified to withdraw his Pag-IBIG contributions due to membership maturity.

Members who have active contributions under both the Pag-IBIG I and Pag-IBIG II Programs, the membership contributions under Pag-IBIG II shall be considered to meet the required 24 monthly contributions.

For member with an outstanding Pag-IBIG housing loan may be allowed to avail of an MPL, provided that the account is not more than nine months in arrears and is not yet cancelled or foreclosed.

However, a member with an outstanding Pag-IBIG housing loan that is more than nine months in arrears but is not yet cancelled or foreclosed may be allowed to avail of an MPL, provided that the purpose of the MPL is to update his/her housing loan arrearages. The MPL proceeds to be applied on the housing loan arrearages shall be subject to the applicant's loan entitlement.

LOAN AMOUNT

An eligible borrower's loan entitlement shall depend on the number of contributions made, based on the following schedule:

No. of Contributions

Loan Amount

24-59 months

Up to 60% of TAV

60-119 months

Up to 70% of TAV

At Least 120 months

Up to 80% of TAV

INTEREST RATE

10.75% per annum for the duration of the loan.

LOAN TERM

Maximum period of twenty-four (24) months with grace period of 2 months for local accounts and 5 months for centralized accounts.

Centralized accounts shall refer to employers that prepare the payroll in advance, usually at the head/central office. All other accounts not falling under the category of centralized accounts shall be classified as local accounts.

LOAN PAYMENT

For employed members, payments shall be made through

salary deduction

For voluntary members/individual payors, payments shall be made through any of the following modes:

- Salary deduction

- Over-the-Counter;

- Auto-debit arrangement with banks;

- Other modes that Pag-IBIG Fund may adopt in the future

PENALTY RATE

Ð…% of any unpaid amount for every month of delay

For borrowers paying their loans through automatic salary deduction, penalties shall be cancelled/reversed only upon presentation of proof that non-payment was due to the fault of the employer. The said penalties shall then be charged against the employer.

LOAN RELEASE

Through a check payable to the borrower or shall be credited to the borrower's account through LANDBANK's Payroll Credit Systems Validation (PACSVAL

LOAN RENEWAL

Payment of at least six (6) amortizations.

 CALAMITY LOAN PROGRAM

The Program provides financial assistance to Pag-IBIG member-victims in calamity-stricken areas.

Pag-IBIG Calamity Loan Program

HDMF Circular No. 195

LOAN PURPOSE

The program provides financial assistance to Pag-IBIG member-victims in calamity-stricken areas.

BORROWER ELIGIBILITY

Member must have made at least 24 monthly contributions;

Member is actively paying contributions at the time he applies for a loan, and commits to continuously remit contributions for the term of the loan.

A resident of the area which is declared calamity-stricken.

LOAN AMOUNT

The member is entitled to borrow up to 80% of the Total Accumulated Value (TAV) of his savings.

For members with existing MPLs, the outstanding loan balance shall be deducted from the proceeds of the calamity loan.

INTEREST RATE

The loan is charged an interest rate of 10.75% per annum. Interest for the grace period is capitalized and amortized over the term of the loan.

LOAN PERIOD/RENEWAL

The loan shall be amortized over a period of 24 months with a grace period of 5 months.

Should another calamity occur in the same area, a borrower may renew his calamity loan any time. The outstanding balance of his existing loan, together with any accrued interests, penalties and charges, shall be deducted from the proceeds of the new loan.

AVAILMENT PERIOD

The Pag-IBIG member-victim must avail himself of the Pag-IBIG Calamity Loan within a period of 90 days from the occurrence of the calamity.

 HOUSING LOAN

 RETAIL

 HOUSING LOAN PROGRAM

REVISED Pag-IBIG HOUSING LOAN PROGRAM ( Cir. 213)

Pag-IBIG Housing Loan Program

For End-User Financing (Cir. 213)

LOAN PURPOSE

The Pag-IBIG housing loan may be used to finance any one or a combination of the following:

1. Purchase of a fully developed lot not exceeding 1,000 square meters, which should be within a residential area;

2. Purchase of a lot and construction of a residential unit thereon;

3. Purchase of a residential house and lot, townhouse or condominium unit, inclusive of a parking slot, which may be:

• old or brand new

• a property mortgaged with HDMF; or

• an acquired asset which is disposed of through sealed Public Bidding or Negotiated Sale, Rent-to-Own Program.

4. Construction or completion of a residential unit on a lot owned by the member;

5. Home improvement; i.e., any alteration in an existing residential unit intended by a homeowner to be a permanent integral part thereof, which will enhance its durability and material value;

6. Refinancing of an existing mortgage loan with an institution acceptable to HDMF, provided that the loan to be refinanced is current and updated at the time of loan application; and the account reflects a perfect repayment history for at least 2 years, as supported by the borrower’s official receipts.

7. Combination of loan purposes shall be limited to the following:

• purchase of a fully-developed lot not exceeding 1,000 square meters and construction of a residential unit thereon

• purchase of a residential unit, whether old or new, with home improvement; or

• refinancing of an existing mortage, specifically a lot loan, with construction of a residential unit thereon.

BORROWER ELIGIBILITY

To qualify for a Pag-IBIG housing loan, a member shall satisfy the following requirements:

1. Must have made at least 24 monthly contributions at the time of loan application as evidenced by the remittance of at least 24 monthly contributions at the time of loan application; or

2. Not more than 65 years old at loan maturity and must be insurable;

3. Has the legal capacity to acquire and encumber real property;

4. Has passed satisfactory background/credit and employment/ business checks of the developer and Pag-IBIG Fund;

5. Has no outstanding Pag-IBIG housing loan, either as a principal borrower or co-borrower;

6. Has no outstanding Pag-IBIG MPL in arrears at the time of loan application. A member whose MPL is in arrears shall be required to pay his arrearages over the counter to update his account.

LOAN AMOUNT

Maximum of P2,000,000.00 Million, which shall be based on the lowest of the following: the member’s actual need, his loan entitlement and the loan-to-collateral ratio.

1. Loan Entitlement Based on Pag-IBIG Contributions

MONTHLY CONTRIBUTIONS LOAN ENTITLEMENT

POP Pag-IBIG I & II

US$ equivalent at point of availment P100 Up to P125,000

200 Over P125,000-P250,000

300 Over P250,000-P375,000

400 Over P375,000- P500,000

600 Over P500,000 - P750,000

800 Over P750,000 - P1,000,000

1,000 Over P1,000,000- P1,250,000

1,200 Over P1,250,000-P1,500,000

1,400 Over P1,500,000-P1,750,000

1,600 Over P1,750,000- P2,000,0

LOAN-TO-COLLATERAL RATIO

The ratio of the loan amount to the appraised value of the collateral shall not exceed the following rates:

Loan Amount With Buyback Guaranty Without Buyback Guaranty

Up to P300,000 100% 100%

Over P300,000 to P750,000 100% 90%

Over P750,000 to P1M 90% 80%

Over P1M to P2M 90% 70%

INTEREST RATE

Loan Amount If payment is made on or before due date If payment is made after due date

Up to P150,000 6% 8%

Over P150,000 to P180,000 7% 9%

Over P180,000 to P300,000 9% 11%

Over P300,000 to P500,000 10% 12%

Over P500,000 to P750,000 11% 13%

Over P750,000 to P2M 12% 14%

LOAN TERM

The Pag-IBIG housing loan shall be repaid according to the following schedule:

Loan Amount Term of Loan

Up to P750,000 Maximum of 30 years

Over P750,000 - P2,000,000 Maximum of 20 years

LOAN PAYMENT

Over-the-Counter (OTC)

Salary Deduction

Issuance of Postdated Checks (PDCs)

Auto Debit Arrangements with Banks

COLLATERAL

First Real Estate Mortgage (REM)

Contract-to-Sell (CTS)

LOAN CHARGES

A processing fee of P3,000.00 which shall be paid as follows:

a. P1,000.00 upon filing of the loan application, which shall be non-refundable if the loan is disapproved;

b. P2,000.00 upon loan takeout.

Other expenses such as standard appraisal fees, registration expenses, notarial and documentation fees, as well as taxes pertinent to the sale and transfer of the property to the borrower.

How to apply:

For Direct or Retail

For Developer-Assisted

 RENT-TO-OWN PROGRAM

The Program aims to institute a mechanism through which the HDMF shall further expedite the recovery of its investments in non-performing mortgage loans, and provide Pag-IBIG members, whose current income cannot sustain the monthly amortization on a Pag-IBIG housing loan, with a facility that will provide affordable housing, and ensure home ownership by the time they become eligible for such loan.

Pag-IBIG Rent-To-Own Program

HDMF Circular No. 177-A

OBJECTIVE

The Program is aimed at instituting a mechanism through which the HDMF shall further expedite the recovery of its investments in non-performing mortgage loans, and provide Pag-IBIG members, whose current income cannot sustain the monthly amortization on a Pag-IBIG housing loan, with a facility that will provide affordable housing, and ensure home ownership by the time they become eligible for such loan.

THE RENT-TO-OWN SCHEME

Housing units acquired by HDMF shall be leased to qualified Pag-IBIG members, who shall enter into a Contract of Lease with Option to Purchase with HDMF, for a period of not more than five (5) years.

At the end of the term of the lease, a Lessee who complies with the provisions of the Lease Agreement, and who qualifies for a Pag-IBIG housing loan, shall be required to exercise his option to purchase the leased housing unit.

A Lessee who does not exercise his option to purchase shall not be allowed to occupy the housing unit after the expiration of the Contract of Lease.

ELIGIBILITY REQUIREMENTS

An applicant shall satisfy the following requirements to qualify under the Rent-to-Own Program:

a. Must be a contributing Pag-IBIG member at the time of application;

b. Must have a monthly gross family income of at least P4,000. For this purpose, gross family income shall be defined to mean the income of the members of the family up to the 1st degree of affinity or consanguity;

c. Must not be a homeowner;

d. Must not have an outstanding housing loan from any financial institution, whether public or private;

e. Must have the legal capacity to enter into a contract;

f. Must not have previously availed of the Rent-to-Own Program.

TERMS AND CONDITIONS OF THE LEASE

1. Monthly Rental

The Fund shall set the monthly rental on the unit to be leased on the basis of the prevailing rental rate in the area, which shall not be lower than one thousand pesos (P1,000.00).

The monthly rental shall be increased annually by 10%, or at a rate that shall allow the monthly rental to equal the theoretical monthly amortization at the end of the term of the lease, and shall be applied as payment on the purchase price of the property only upon the Lessee’s exercise of the option to purchase.

2. Advance Rental and Deposit

Upon signing of the Contract of Lease, the Lessee shall be required to pay one month's rent in advance and deposit an amount equivalent to two month's rent.

The rental deposit shall not be applied to monthly rentals during the term of the lease. It shall be used to cover unpaid bills, as well as the expenses necessary to repair any loss or damage to the property (except normal wear and tear) attributable to the fault or negligence of the Lessee who does not exercise his option to purchase, and is required to vacate the property upon the expiration of the Contract of Lease.

3. Payment and Remittance of Monthly Rental

The Lessee shall, without need of demand, pay the monthly rental in cash or check to any Pag-IBIG branch office or to any authorized Pag-IBIG collection agent on or before the 20th day of the month following the execution of the Contract of Lease with HDMF, and every month thereafter.

4. Penalty Charge

The Lessee who fails to pay the rent within the month that the payment is due shall be charged a penalty of 1/20 of 1% of the amount due per day of delay, reckoned from the 21st day of the month that payment is due.

5. Default

The Lessee shall be in default when he fails to pay three (3) consecutive monthly rentals, and/or three consecutive monthly Pag-IBIG contributions.

6. Term of Lease

The property subject of the Contract shall be leased by HDMF for a period of not more than five years.

7. Substitution of Lessee

In the event of the Lessee's death or incapacity to pay the monthly rental on account of loss of income due to physical disability or unemployment and such other meritorious reasons acceptable to the Fund, the Lessee may be substituted by a member of his family up to the 1st civil degree of affinity or consanguity. The monthly rentals paid by the original Lessee shall inure to the benefit of the substitute Lessee.

8. Termination of the Contract

HDMF shall terminate the Contract of Lease on the following grounds:

a. Default in monthly rentals;

b. Default in Pag-IBIG membership contributions;

c. Violation of any provision of the Contract;

d. Fraud and misrepresentation; and

e. Voluntary cancellation on the part of the Lessee.

9. Application of Total Accumulated Value (TAV)

In case the rental deposit is not sufficient to cover any indebtedness or obligation incurred by the Lessee for the duration of his stay in the property, the Lessor shall have the option to apply the TAV of the Lessee on any indebtedness, and shall be effected:

a. Immediately after cancellation/termination of the contract; or

b. Immediately after eviction.

TERMS AND CONDITIONS OF THE OPTION TO PURCHASE

1. Exercise of Option

HDMF shall require the Lessee to exercise his option to purchase not later than the end of the term of the lease. Failure of the Lessee to exercise this option within the given period shall be ground for the Lessee's eviction from the property.

2. Purchase Price

Shall be equal to the appraised value of the property as of the date of the execution of the Contract of Lease with Option to Purchase.

3. Purchase through Pag-IBIG Housing Loan

The Lessee may exercise his option to purchase by availing himself of a Pag-IBIG housing loan subject to the Pag-IBIG housing loan guidelines prevailing as of the date of purchase.

 HOUSING LOAN RESTRUCTURING & PENALTY CONDONATION

The program covers Pag-IBIG housing loan borrowers who wish to restructure their accounts for the following purposes:

To update or fully pay delinquent accounts

To shorten or lengthen the term of the housing loan.

To avail of the two (2) interest rate structure provided under Section 4 of the Consolidated Guidelines of the Pag-IBIG Housing Loan Program (HDMF Circular No. 189-A) to housing loan borrowers whose accounts are updated.

Housing Loan Restructuring and Penalty Condonation Program

HDMF Circular No. 194-B

COVERAGES

These guidelines shall apply to all Pag-IBIG housing loan borrowers who wish to restructure their accounts for the following purposes:

To update or fully pay delinquent accounts;

To shorten or lengthen the term of the housing loan.

To avail of the two (2) interest rate structure provided under Section 4 of the Consolidated Guidelines of the Pag-IBIG Housing Loan Program (HDMF Circular No. 189-A) to housing loan borrowers whose accounts are updated.

Delinquent borrowers shall mean borrowers who are in arrears for at 3 months in the payment of their housing loan obligations with the HDMF, and shall include the following:

1. Delinquent borrowers who qualify for penalty condonation under Section 2 of RA 8501, i.e. borrowers who have not yet availed of any penalty condonation program from any government financial institution or agency involved in the National Shelter Program;

2. Delinquent borrowers who qualify for penalty condonation under Section 3 of RA 8501, i.e., borrowers with an annual income of not more than P300,000 whose accounts have been in arrears for at least two years, and who have defaulted on their loans due to justifiable reasons deemed as such by the HDMF Board of Trustees;

3. Delinquent borrowers who do not qualify for penalty condonation under Sections 2 or 3 of RA 8501;

4. Housing loan borrowers whose mortgages have been foreclosed, but the title has not yet been consolidated in the name of HDMF; provided the borrower fully pays all the costs and expenses incurred by HDMF relative to the foreclosure, sale and custody of the property or capitalizes these expenses over the term of the restructured loan;

5. Housing loan borrowers whose loan terms have expired;

6. Heirs of deceased housing loan borrowers with unpaid loan balance after application of the proceeds of the Mortgage Redemption Insurance (MRI);

7. Successors-in-interest of Pag-IBIG housing loan borrowers, herein defined as individuals who have assumed the original mortgage as supported by legal documents;

8. Group Land Acquisition and Development (GLAD) and other Homeowners’ Association (HOA) accounts;

9. Borrowers whose loans are secured by a Contract-to-Sell (CTS) including accounts which have been cancelled due to delinquency.

PENALTY CONDONATION

Pursuant to Sections 2 and 3 of RA 8501 or the "Housing Loan Condonation Act of 1998", all unpaid penalties of Pag-IBIG housing loan borrowers shall be condoned; provided that all due and demandable arrearages are restructured or fully paid.

1. Delinquent borrowers who have not yet availed themselves of any penalty condonation program from any government financial institution or agency involved in the National Shelter program shall be granted automatic condonation of penalties incurred up to December 31, 2002, as provided under Section 2 of RA 8501.

2. Delinquent borrowers who have previously availed themselves of a penalty condonation program from any government financial institution or agency involved in the National Shelter Program shall be entitled to a full condonation of penalties incurred up to the date of application for loan restructuring, provided the borrower meets the requirements under Section 3 of RA 8501.

ARREARAGES TO BE RESTRUCTURED

The amount to be restructured shall consist of the following total arrearages:

Principal

Interest

Insurance Premiums

Payments to the Housing Contributory Fund as of the date of application for loan restructuring

Other Advances/Expenses

Penalties and other Charges - for those who shall not qualify for penalty condonation

In case of foreclosed accounts, the amount to be restructured shall be the total outstanding loan balance as of the date of loan restructuring, plus foreclosure expenses.

The unpaid membership contributions shall be paid in cash or through a plan of payment not to exceed 2 years.

DOWNPAYMENT REQUIRED

1. A minimum of 10% of the total arrearages plus unpaid membership contributions to be paid prior to loan restructuring. The 10% downpayment shall be applied according to the following order of priorities:

• Arrearages on Insurance Premiums

• Interest and Principal

2. In case the borrowers fail to make the required downpayment, HDMF shall:

a. Apply at least 40% of the Total Accumulated Value (TAV) of the borrowers' savings to his total arrearages, if they have an outstanding Pag-IBIG Multi-Purpose Loan (MPL), and have not previously offset their TAV against their MPL; or

b. Apply the entire amount of the borrowers’ TAV to their total arrearages, if they have no outstanding MPL.

In case the TAV is not enough to fully cover the required downpayment, the remaining balance shall just be incorporated as part of the restructured loan.

The cut-off date for TAV offsetting shall be the date of filing of application for loan restructuring.

INTEREST RATE

Borrowers who shall update/restructure their loans shall be entitled to a two-interest rate structure whereby borrowers who shall pay their amortizations on or before the due date shall be charged a lower interest rate according to the following schedule:

RESTRUCTED LOAN AMOUNT

INTEREST RATE

If payment is made On or before due date After due date

Up to P180,000 9% 12%

Over P180,000 - P500,000 12% 16%

Over P500,000 - P2,000,000 14% 18%

In case the original loan is socialized housing loan, the restructured loan shall bear interest at 9%.

TERM OF THE RESTRUCTURED LOAN

1. For delinquent borrowers who do not qualify for penalty condonation under Sections 2 and 3 of RA 8501, the restructured loan shall be repaid over a period of 20 years or the remaining term of the original loan, whichever is longer.

2. The term of the restructured loan classified below shall be the remaining term of the original loan:

a. Delinquent borrowers who qualify for penalty condonation under Sections 2 and 3 of RA 8501;

b. Accounts covered by CTS Scheme which have been cancelled due to delinquency;

c. Accounts of housing loan borrowers with unpaid loan balance after application of the MRI coverage.

3. The term of the restructured loan classified below shall be a maximum period of 10 years, reckoned from the date of approval of the loan restructuring:

a. Accounts whose mortgages have been foreclosed;

b. Accounts whose loan terms have expired.

In no case, however, shall the term of the restructured loan exceed the difference between the borrower's age at the time of application for loan restructuring and age 65.

PERIOD OF AVAILMENT

Delinquent Pag-IBIG housing loan borrowers shall file their application for loan restructuring within 6 months from the date of receipt of the Notice of Demand from the Billing and Ledgering Department/Division during which time the cancellation/foreclosure proceedings shall be suspended by HDMF.

After the given period, HDMF shall enforce the appropriate legal action on the delinquent accounts.

FEES/CHARGES

Applicants for loan restructuring shall pay the following fees/charges;

a. A processing fee of P200.00 to be paid upon filing of the application;

b. First year’s premium for mortgage/sales redemption insurance to be paid upon approval of the application for loan restructuring.

 WHOLESALE LENDING

 PAG-IBIG TAKEOUT MECHANISM UNDER THE DEVELOPERS’ CTS/REM SCHEME

Pag-IBIG Takeout Mechanism Under the Developers' CTS/REM Scheme (Cir.212)

ACCREDITATION

Pag-IBIG Fund shall accredit developers and projects that shall participate in the program based on the following parameters:

For Developers

The developer/company must be duly authorized to operate as evidenced by a Certificate of Registration from the Securities and Exchange Commission (SEC) or the Bureau of Domestic Trade (BDT).

The developer/company's officers must have an established track record in real estate development.

The developer must show proof of technical and financial capability to undertake and complete the housing project to which the developer shall apply the proceeds of the loan takeouts covered by the Funding Commitment Line.

The developer must pass satisfactory background/credit checks to be conducted by the Fund

For Housing Projects

Permits and Licenses issued by the Local Government Unit (LGU) and other Regulatory Agencies for the housing project covered by the FCL (i.e. License to Sell and Development Permit)

Status of Project Development, i.e. housing loan applications can be delivered not later than sixty (60) calendar days from execution of the Funding Commitment Agreement (FCA)

No Cease and Desist Order (CDO) has been issued by any Regulatory Agency

FUNDING COMMITMENT LINE (FCL)

Amount/Term

- Maximum of P500 Million per annum/per single developer's limit

Commitment Fee

- 1/2% of the projected delivery for the quarter

NOTES:

a. For developers who do not provide buyback guaranty (Window 2), the commitment fee shall be non-refundable.

b. For developers providing buyback guaranty (Window 1), they shall either have the option to seek a refund of the commitment fee paid or apply the same to the succeeding quarter, if the commitment line for the quarter has been fully utilized. Non-utilization or partial utilization of the commitment line shall entail the forfeiture of the remaining line for the quarter and its corresponding commitment fee. In case of re-application for a commitment line that was forfeited, the developer shall pay the commitment fee of one-half percent (1/2%) of the commitment line re-applied for.

Fees and Charges

Processing/Appraisal Fee of P3,000.00, which shall be paid as follows:

P1,000.00 upon filing of the loan application, which is non-refundable in case the application is disapproved;

P2,000.00 upon loan takeout;

Other expenses such as standard appraisal fees, registration expenses, notarial and documentation fees, as well as taxes pertinent to the sale and transfer of the property to the borrower;

Developers who will request split payment of proceeds shall be charged a service fee equivalent to 0.1% of the total loan value;

Backup Guaranty

Bank Guaranty

Surety/Cash Bond

Guaranty provided by the SHDA Guaranty Fund or any Pag-IBIG - accredited institution

Pag-IBIG Housing Bond

Retention

Other forms of backup guaranty acceptable to the Fund

Conversion Rates

Loan Value Up to P180,000 Over P180,000 to P500,000 Over P500,000 to P1M Over P1M to P2M

BIR 2.5% 3.5% 4.5% 5.0%

RD 1.5% 1.5% 1.5% 1.5%

LGU 1.0% 1.0% 1.0% 1.0%

5.0% 6.0% 7.0% 7.5%

Retention in Lieu of Backup Guaranty

Pag-IBIG Housing Bonds

Certificate of Time Deposit and other bank certificates

Trust / Escrow Accounts

Government securities (treasury bonds, bills, notes, etc.)

Other assignable instruments acceptable to the Fund

Retention Rates

Loan Value Retention Rates (inclusive of conversion rates)

Up to P180,000 7.5%

Over P180,000 to P500,000 8.5%

Over P500,000 to P1,000,000 9.5%

Over P1M to P2M 10.0%

 DEVELOPMENT LOAN PROGRAM

Create additional housing inventories through the provision of developmental financing at easier terms and lower rates to developers/ proponents of housing projects.

Developmental Loan Program

HDMF Circular No. 184-C

OBJECTIVE

The program seeks to create additional housing inventories through the provision of developmental financing at easier terms and lower rates to developers/ proponents of housing projects.

LOAN PURPOSE

The proceeds of the developmental loan may be used for any or all of the following purposes:

Development of residential subdivision including medium/high rise residential buildings (MHRBs);

Construction of units eligible for mortgage financing under the Consolidated Guidelines of the Pag-IBIG Housing Loan Program.

No part of the loan, however, shall be used to purchase land.

LOAN AMOUNT

Shall be based on actual project need as supported by cash flow projections, and shall not exceed 40% of prudent production cost or P100M per phase, whichever is lower.

For MHRBs, the loan amount shall be up to a maximum of 60% of land development and building construction cost or P200 Million, whichever is lower.

INTEREST RATE

At the option of the borrower, the loan shall bear an interest rate defined as the prevailing market rate at point of drawdown of either of the following:

1. 2-year Treasury Notes plus 3%; or

2. 91-day Treasury Bills plus 5%, subject to repricing every 6 months.

LOAN TERM

Shall not exceed three (3) years.

LOAN PAYMENT

The loan shall be paid as follows:

a. Interest - shall be paid quarterly, with the 1st payment due at the end of the 1st quarter from the date of initial loan release.

b. Principal - shall be made quarterly with the 1st payment due on or before the end of the 18th month from the date of initial loan release.

c. Application of take-out proceeds - At least 20% of the mortgage take-out proceeds due the developer from HDMF shall be applied to the outstanding principal at any time after the initial release of the developmental loan.

PROCESSING FEE

The developer shall pay a processing fee of ј of 1% of the approved loan amount or P50,000.00, whichever is lower, inclusive of a non-refundable filing fee of P10,000.00.

PENALTY

The developer who fails to pay his loan obligations when due shall be charged a penalty of 1/20 of 1% of any unpaid amount for each day of delay or 18% p.a..

 PROGRAM FOR THE DEVELOPMENT OF MEDIUM/HIGH-RISE CONDOMINIUM BUILDING (MHRB) PROJECTS IN METRO MANILA AND HIGHLY URBANIZED CITIES

Provides a ready inventory of condominium units for sale at more affordable prices to eligible Pag-IBIG members in the Metro Manila area and highly urbanized cities.

Pag-IBIG Program for the Development of Medium/High Rise Condominium Building (MHRB) Projects in Metro Manila and Highly Urbanized Cities

HDMF Circular No. 188-C

OBJECTIVES

1. To provide a ready inventory of condominium units for sale at more affordable prices to eligible Pag-IBIG members in the Metro Manila area and highly urbanized cities;

2. To provide Pag-IBIG members who are working in the Metro Manila area and highly urbanized cities with the opportunity to acquire condominium units in the area, thereby reducing transportation costs to and from their places of habitat;

3. To provide developers with a liquidity mechanism that will increase capacity for housing production and reduce project financing costs, through a faster turnaround of their investments in the construction and development of MHRB buildings in the Metro Manila area and highly urbanized cities;

4. To simplify and facilitate the processing of end-user financing for eligible Pag-IBIG members, given time-savings realized in the wholesale appraisal and inspection of housing units in medium/high-rise condominium buildings which have been accredited by Pag-IBIG Fund.

TERMS AND CONDITIONS FOR AVAILMENT

1. Amount.

Each drawdown shall not exceed the lowest of the following:

• 90% of the appraised value of the completed condominium unit;

• 90% of the developer’s selling price; or

• P1.0 million, for every completed condominium unit delivered to HDMF

2. Maturity.

Each drawdown shall have a maturity period of six (6) months.

3. Interest.

The loan shall bear an interest rate defined as the prevailing market rate of 2-year Treasury Notes at point of drawdown, plus 3% during the six (6) months marketing period, and 5% thereafter.

4. Loan Payment

The loan principal and the applicable accrued interest charges shall be paid from the take-out proceeds.

5. Processing Fee

The developer shall pay a non-refundable processing fee of P10,000.00.

 PAG-IBIG CITY PROGRAM

Provides a ready inventory of completed housing units in a project to be known as a Pag-IBIG City, which shall be available for sale at more affordable prices to Pag-IBIG members, who shall likewise be assured that the project meets the standards of the HDMF as to land development and house construction.

Pag-IBIG City Program

HDMF Circular No. 186-D

OBJECTIVES

1. To provide a ready inventory of completed housing units in a project to be known as a Pag-IBIG City, which shall be available for sale at more affordable prices to Pag-IBIG members, who shall likewise be assured that the project meets the standards of the HDMF as to land development and house construction.

2. To lower project financing costs since HDMF shall provide a faster turnaround of the developer’s investment, thereby increasing his capacity for housing production. This shall redound to the benefit of Pag-IBIG members in terms of lower priced housing packages.

3. To simplify and facilitate the processing of end-user financing, given time-savings realized in the wholesale appraisal and inspection of housing units in one project, and the use of the modified CTS scheme in lieu of the REM scheme, where applicable.

TERMS AND CONDITIONS FOR AVAILMENT

1. Amount.

Each drawdown shall not exceed 70% of the lower of two values:

• the developer's selling price; or

• HDMF’s appraised value of the completed house and lot units which are delivered to HDMF in accordance with the terms and conditions of the MOA.

2. Maturity - Each drawdown shall ha