PAG-IBIG and Developer Loan Assisted Program

The Pag-IBIG Developer-Assisted Housing Loan program allows property developers to assist their clients in applying for
a housing loan through Pag-IBIG Fund. This process benefits both the buyer and the developer by simplifying the
application, approval, and processing stages. Here's a step-by-step guide on how this process works:

Step-by-Step Process for Developer-Assisted Housing Loan

1. Developer Accreditation
The developer must be accredited by Pag-IBIG Fund before participating in the Developer-Assisted Loan
program. Accreditation requirements include submitting necessary company documents, a proven track record,
and compliance with Pag-IBIG standards.

2. Buyer Qualification and Loan Application. The developer screens potential buyers to determine if they meet Pag-
IBIG Fund's eligibility criteria, such as:

 Active Pag-IBIG Fund membership with at least 24 monthly savings.

 Age not exceeding 65 years old at the time of loan application and not more than 70 years old at loan maturity.
 No existing Pag-IBIG housing loan that is in default.

If the buyer qualifies, the developer assists them in filling out the Pag-IBIG Housing Loan Application Form and gathers
all necessary documents, including:

Two (2) valid IDs

 Proof of income (e.g., payslips, Certificate of Employment, Income Tax Return)

 Marriage Certificate (if applicable)
 Latest tax declaration and updated real estate tax receipts for the property

3. Submission to Pag-IBIG Fund
 The developer submits the complete set of documents to Pag-IBIG Fund on behalf of the buyer.
 Pag-IBIG evaluates the loan application based on the buyer's creditworthiness, property appraisal, and other
required assessments.
4. Loan Approval and Notice of Approval (NOA)

If the loan application is approved, Pag-IBIG Fund issues a Notice of Approval (NOA) or Letter of Guaranty (LOG) to the
developer and the buyer. The developer coordinates with the buyer to comply with the conditions specified in the NOA.

Once all conditions are met, both the buyer and the developer sign the loan documents.

5. Loan Release: The loan proceeds are usually released directly to the developer as payment for the property. The
developer then transfers ownership of the property to the buyer, completing the sale.

Pag-IBIG Fund will notify both the developer and the buyer once the loan amount has been disbursed.
6. Transfer of Title

The developer processes the transfer of the property title to the buyer's name.

After the transfer, the new title is annotated with a mortgage in favor of Pag-IBIG Fund as security for the housing loan.

Summary of Terms and Conditions for Availment (HDMF Circular No. 301)

1. Amount

 Each loan availment cannot exceed 70% of the total value of the takeout proceeds or collectibles
assigned to HDMF for accounts that have a Notice of Approval (NOA).

2. Maturity

 The maturity period for each loan availment is 90 calendar days, with an option to renew for an
additional 90 calendar days.

3. Interest

 The loan will have an interest rate based on the higher of:
o The prevailing market rate of 91-day Treasury Bills plus 3%, or
o The BSP Lending Rate plus 1%.
 For loan renewals, the interest will be:
o 182-day Treasury Bills plus 4%, or
o BSP Lending Rate plus 1%, whichever is higher.
 The interest rate will not be lower than 6.5% in any case.

4. Collateral

 The developer shall execute in favorof, and deliver to Pag-IBIG a Deed of Assignment (DA) along with
a Real Estate Mortgage, assigning the takeout proceeds and mortgaging the property (house and lot
packages) for which HDMF will provide funding.

5. Service Fee

 A service fee of 0.1% of the drawdown amount must be paid by the developer.

6. Loan Payment

 Loan principal and accrued interest will be paid from the takeout proceeds. HDMF will provide the
developer with a statement of payment application within seven working days after receiving all
required mortgage documents.
 If the takeout proceeds cover the developer's outstanding loan balance and interest, HDMF will remit
any remaining funds back to the developer.

Conclusion
These terms and conditions outline the framework for developers to access funds from HDMF, ensuring clarity
regarding loan amounts, interest rates, collateral requirements, service fees, and payment processes. This helps
facilitate the efficient management of housing loans within the Pag-IBIG system.

7. Penalty

 If the developer fails to pay their obligation by the due date, they will incur a penalty of 1/20 of 1% of the unpaid
amount for each day of delay, which translates to an annual rate of 18%.

8. Default

 If the developer does not comply with the requirements for the release of the take-out proceeds after an
extension or renewal, the entire outstanding loan, along with accrued interest, will be considered due
immediately, without further notice.

9. Effects of Default

Upon default, the following actions may be taken by the Fund, either individually or collectively:

1. Redemption of TCTS: Require the developer to redeem the individualized TCTS (Transfer Certificate of Title).
2. Takeout of Accounts: Takeout accounts with a 100% assignment of proceeds.
3. Registration and Foreclosure: Register the individual Real Estate Mortgage (REM) on the individual Certificates
of Title (TCTs) for the housing units involved and initiate foreclosure proceedings.
4. Application of Funds: Apply any funds in the Fund’s possession belonging to the borrower towards the
outstanding obligation, in whole or in part.
5. Enforcement of Rights: Enforce all rights and remedies outlined in the Loan Agreement and Promissory Note.
6. Blacklist or Suspension: Blacklist or suspend the developer according to the Fund's guidelines.
7. Legal Remedies: Pursue any legal remedies available under existing laws, including filing an action for damages
or money, and possibly seeking attachment as a provisional remedy when statutory grounds exist.

Conclusion

These provisions set clear penalties and consequences for developers who fail to meet their obligations,
ensuring that the Fund can protect its interests and recover any outstanding amounts. The measures outlined
provide a framework for addressing defaults and emphasize the seriousness of maintaining compliance with
loan agreements.
Circular No. 344

Guidelines Implementing the Pag-IBIG Fund Takeout Mechanism for Developer-Assisted Housing Program

I. OBJECTIVES

The program seeks to achieve the following objectives:

1. To encourage the participation of developers in providing the needed housing inventory that can be made available
for sale to Pag-IBIG member-buyers via a Pag-IBIG housing loan.

2. To define parameters in the allocation and disbursement of funds allocated for housing, specifically for Developer-
assisted housing loans.

II. COVERAGE

The coverage under these guidelines shall be optional for accredited Developers for six (6) months from date of
effectivity. Within the said period, accredited Developers may still be evaluated and be subject to the terms of Circular
Nos. 259, 287 and 298. After 6 months from effectivity, coverage herein shall be mandatory.

III. MECHANICS

1. Pag-IBIG Fund shall accredit Developers who shall participate in the program to ensure that its objectives are met.

2. The Fund and the accredited Developer shall enter into a Memorandum of Agreement (MOA) providing for among
others:

2.1. That the Fund shall provide a funding allocation to the Developer upon compliance with the terms and conditions
set by the Fund.

2.2. That the Developer shall receive, pre-process and deliver applications of Pag-IBIG member-buyers for the purchase
of a lot condominium unit in the Developer's subdivision/condominium project.

house and lot /

2.3. The Fund will approve applications from Pag-IBIG member-buyers for lot/house or condominium
purchases that meet its criteria.

2.4. A Deed of Absolute Sale (DOAS) will be executed for the residential unit, while the Fund will issue a Deed
of Conditional Sale (DCS) to the member-buyer. If the loan-to-value ratio is 50% or less, a REM account may
be established, and a mortgage will be executed in favor of the Fund.

2.5. Developers are responsible for processing and covering the costs to transfer the property title from their
name to the Fund's name.

2.6. Release of proceeds will follow the established terms and conditions.

2.7. Developers must buy back accounts affected by warranty breaches.

2.8. The MOA between the Developer and Fund will include cross-default provisions as defined in existing loan
documents.

3. Developers must submit member-buyers' applications within 60 days of signing the MOA.
4. Applications will be processed within 15 working days. A Notice of Approval (NOA) will be issued if
criteria are met, valid for 90 days. If not submitted in time, the application can be re-filed with a new
fee. If deficiencies are found, a Notice of Deficiency will be issued, allowing 10 working days for
corrections; otherwise, a new application and fee will apply. Notice of Disapproval: If the application is
disapproved, the Fund will issue a Notice of Disapproval detailing the reasons.

5. Advance Evaluation and Inspection: Developers can request advance evaluations of borrowers or
inspections of completed units by submitting a written request and paying the filing fee. The Credit
Investigation Report (CIR) and Buyer Validation Sheet (BVS) must accompany the housing application,
both valid for six months.

6. Documentation Requirements: Developer-assisted accounts must be backed by a Deed of Conditional

Sale (DCS). The Fund may allow accounts secured by a Real Estate Mortgage if the loan-to-collateral
ratio is 50% or less. The Senior Management Committee can adjust limits on housing packages
requiring DCS documentation as needed.

7. Collection Servicing Agreement (CSA): Developers can be accredited to enter into a CSA with the
Fund, acting as a collecting agent for one year, provided they meet specified criteria.