TURNKEY CMP

MODALITY
AGENDA
I. ABOUT TURNKEY CMP MODALITY
II. STAKEHOLDER ELIGIBILITY
III. PROJECT VALUATION AND APPROVAL PHASE
IV. PILOT PHASE AND APPROVAL
V. PROJECT TURNOVER AND CLOSURE
I. TURNKEY CMP MODALITY
• Approved through Board Resolution Nos. 767 and 898 dated
________.
• It was created to accelerate the delivery of housing services to
low-income families from the formal and informal sectors of
Philippine society.
• Utilizes the People’s Plan approach wherein the Community
Association (CA) chooses the site where they intend to
relocate, partners with the developer to build and develop its
housing project, applies for a CMP loan to finance the project,
and monitors the project’s development and construction.
Overview of the Process
• CA and the developer negotiate and agree on a housing project under
1 the ambit of a People’s Plan Approach;

• CA and the developer submit the documents to SHFC for financing;

2

• Developer submits the documents for provisional accreditation;

3
• SHFC conducts due diligence on the mortgageability, concept and plans,
designs and specifications if equivalent to the project cost, and conducts initial
4 valuation of the project cost and site suitability study;

• CA undertakes capacity building and empowerment requirement;

5
• SHFC presents the project to the SHFC Credit Committee, Management Committee,
Executive Committee and the Board of Directors, for issuance of a Letter of
6 Guaranty for a minimum of 10% of the total number of units, pending the final
accreditation of the developer and the third-party appraisal. Subsequent LOGs shall
be issued subject to the evaluation and acceptance of the constructed units and
another approval of the Board;
continuation…

• SHFC and CA inspect and approve the Pilot Phase of the Turnkey
7 CMP project;

• External appraiser conducts an appraisal

8

• SHFC issues the final accreditation of the developer;

9

• SHFC processes and releases the loan to the SHFC-accredited Developer.

10
Turnkey CMP is a completed housing units based
on either of the following scenarios:

Turnkey CMP Site

Turnkey CMP Turnkey CMP House
Development and
Complete Package Development
House Construction

The developer develops the The developer constructs the

The developer develops the housing unit, with the land
project site and constructs the
entire project from lot and site development
housing units, with the land
acquisition, site provided for by another
already purchased in the
development, and house stakeholder; either the land
name of the CA whether
construction. and site development already
financed by SHFC or
purchased in the name of the
otherwise; land provided for
by another stakeholder CA whether financed by
SHFC or otherwise; land and
through donation; or land
site development provided
under usufructuary
for by another stakeholder
arrangement with SHFC or
through donation; or land
other stakeholders.
and site development under
usufructuary arrangement
with SHFC or other
stakeholders.
II. STAKEHOLDER
ELIGIBILITY
Signification that Developers Are Interested to
Undergo Turnkey shall:
• Undergo a Turnkey CMP Orientation conducted by the concerned
SHFC Operations branch/hub. (A Certificate of Completion shall
be issued by SHFC to the developer who has successfully
completed the orientation)
• Letter of Intent
 Accreditation Criteria for
Developers Engaged in Turnkey
CMP
 Provisional Accreditation with Additional
Provisional On-Going PCAB Application
Engaged in Turnkey CMP Full Requirement for
Accreditation Package Final Accreditation
• If to engage in Turnkey • Audited Financial • Construction and
CMP Site Development Statement; acceptance of Pilot
and House Construction, • Certification of credit Phase;
and Turnkey CMP House line from the bank or • Inspection of office,
Construction, a Valid reputable suppliers equipment, and on-going
Philippine Contractors and completed projects;
Accreditation Board • Valid PCAB license for
(PCAB) license Developers engaged in
• Certificate of Ownership Turnkey CMP Full
of Equipment; Package with ongoing
• Pictures of the PCAB license during the
Developer’s Office; and, issuance of provisional
• List and pictures of on- accreditation
going and completed
projects.

Once accredited, developers who intend to work with SHFC again shall be required to
update their accreditation requirements with PRD for subsequent projects.
Summary of Requirements
Cancellation of Accreditation of
the Developer
• Cases of abandonment of CA without formal termination of
contract;
• Submission of spurious documents/statements;
• Deviation from approved plans and specifications, or providing
downgraded/substandard specifications without approval from the
CA, SHFC and/or LGU;
• Misrepresentation during pre-qualifications or accreditation;
• Sub-contracting work outside of the exceptions without CA and
SHFC approval;
• Lending of PCAB license to another contractor; and,
• Refusal to rectify the non-compliance of specifications of building
design.
Permits and Licenses Secured
by the SHFC-Accredited
Developer (Project Inclusions)
• The SHFC-Accredited Developer shall be responsible for securing
and paying the necessary costs associated with permits and
licenses, which shall include but not be limited to the following:
the conduct of relocation surveys, subdivision survey, approval
with the land management, land reclassification, land conversion,
Preliminary Approval and Locational Clearance (PALC),
Development Permit, building permits, electrical permits,
occupancy permits, and Fire Safety Inspection Certificate, unless
granted exemption by the local government. It is understood that
work on the project shall not start without the above enumerated
permits and licenses.
III. PROJECT VALUATION AND
APPROVAL PHASE
Endorsement for
Loan Examination Project Approval Multi-Stakeholder
and Mortgage Agreement
Examination
• have been satisfactorily
assessed and valuated by
• Final Design SHFC RED and Pre-Credit • Community
• Project Collateral Committee Level Associations
• endorsed to the SHFC
• Documentary Credit Committee,
• SHFC-Accredited
Requirements Management Committee, Developer
Executive Committee and • Social Housing
SHFC Board of Directors
for approval, subject to the Finance
approved Delegation of Corporation
Authority • LGU (if it’s LGU-
• A Letter of Guaranty shall
be issued for the Pilot
initiated project )
Phase which is equivalent
to a minimum of 10% of
the total number of units.
The succeeding phases
shall be covered by a
separate LOG, subject to
the evaluation and
acceptance of the
constructed units and
another approval of the
Board.
PROJECT VALUATION AND
APPROVAL PHASE
1. Loan Examination and Mortgage Examination
Upon successful negotiation and agreement between the CA and its
chosen developer, the concerned SHFC branch shall conduct the
loan examination and mortgage examination undertakings.
For loan examination, the guidelines embodied in Board Resolution
No. 877 for the conduct and parameters of the Community Needs
Assessment Tool and Process shall prevail. While activities for
mortgage examination shall be consistent with the pre-requirements
and technical due diligence of loans with Accommodation
Mortgage.
• Final Design
- The final design of the proposed housing project,
including the total cost for each beneficiary shall have the
conformity of all the members of the CA. This shall
likewise include provision for open spaces. For projects
involving at least 1,000 members, the SHFC-Accredited
Developer shall construct, at its own cost, infrastructure or
building facilities, such as, but not limited to, commercial
spaces, multi-purpose buildings, health center, livelihood
center, and/or community center.
• Project Collateral
The land on which the housing units are constructed,
including the improvements thereof, shall be the collateral
to the loan. All applicable taxes shall be shouldered by the
developer. Costs for the mortgage fees, transfer fees, and
annotations in the Registry of Deeds (RD) shall be
shouldered by the CA.
• Documentary Requirements
1. Topographic Map, if sloping terrain;
2. Vicinity Map/Site Structure Plan showing the socio-economic
facilities/establishments within 2 to 5-km radius and distance from the
proposed Turnkey CMP site;
3. Data on other Housing Projects (SHFC [CMP/HDH]/Private
Subdivision/Lots) within 2 to 5-km radius;
4. Disaster Risk Reduction Management Plan signed by the authorized
Homeowners Association and Barangay City Official/s.
5. Certified photocopies of the Transfer Certificate of Title (TCTs) (present,
1st back and 2nd back) covering the property to be posted as loan collateral;
6. Copy of tax declaration and tax map;
7. Zoning Certification issued by the concerned LGU citing that the land
use classification of the property is suited for socialized housing or its
equivalent;
8. Lot Plan/Subdivision Plan approved by the local government unit;
9. Complete set of approved plans, Bill of Quantities, and specifications;
Continuation…

10. For Turnkey CMP Complete Package, any document bestowing

ownership to the Developer, which are either the Deed of Conveyance,
Deed of Sale, Deed of Assignment, or Joint Agreement with the
Landowner;
11. Updated Real Property Tax;
12. Certification of Acceptance on the relocation site from the CA; and,
13. Certificate from utility provider stating the provision of required
services upon the completion of the project.

SHFC RED shall review and ensure the completeness and acceptability
of the above listed documents within ten (10) working days from receipt.
2. Endorsement for Project Approval
• Turnkey CMP projects that have been satisfactorily assessed and
valuated by SHFC RED and Pre-Credit Committee Level shall be
endorsed to the SHFC Credit Committee, Management
Committee, Executive Committee and SHFC Board of Directors
for approval, subject to the approved Delegation of Authority
(Section 1.4).
• A Letter of Guaranty shall be issued for the Pilot Phase which is
equivalent to a minimum of 10% of the total number of units. The
succeeding phases shall be covered by a separate LOG, subject to
the evaluation and acceptance of the constructed units and another
approval of the Board.
Approving Committee:
3. Multi-Stakeholder Agreement
A Multi-Stakeholder Agreement shall be forged among the relevant stakeholders
and parties of the Turnkey CMP project, such as, but not limited to, the CA, the
SHFC-Accredited Developer, and SHFC. This agreement shall state the obligations
and responsibilities of the parties involved:
1. Community Associations – are the Turnkey CMP housing loan beneficiaries.
They shall be the primary decision-maker in terms of the location and the housing
unit’s design, utilizing the People’s Plan approach in engaging the developer and
SHFC.
2. SHFC-Accredited Developer – is the entity that primarily assists the CAs in
developing and constructing their technical shelter plan in accordance with the
latter’s preference.
3. Social Housing Finance Corporation – is the financing entity that oversees
approving and supervising the credit for the community’s housing loan through a
People’s Plan Approach. SHFC shall also ensure that the housing loan will have a
cumulative effect of creating resilient and sustainable communities.
Controlled Supervision by the LGU
The receiving local government unit shall also be part of the
agreement, provided that the project is an LGU-initiated project and
shall be given controlled supervision over all stages of the project.
It shall, among others, perform the following functions:
1. Assist in fast-tracking the issuance of necessary permits and
certifications;
2. Coordinate among the project stakeholders (CA and SHFC-
Accredited Developer) their respective project responsibility and
accountability; 10
3. Prepare and submit to SHFC the project status and/or progress
reports, including all project issues and actions taken, if any.
IV. PILOT PHASE AND
APPRAISAL
• What is a Pilot Phase?
-refers to the construction of a minimum of 10% of the total number of
the housing units to be constructed as agreed by the CA and Developer
for Turnkey CMP, where 80% to 90% of the project’s site development is
completed with provision of basic services that have been tested and
approved by the utility provider with respect to its specification and
requirements.
The basic services shall be those stated under Section 21 of the Urban
Development and Housing Act (RA 7279).

• Why undergo Pilot Phase?

-For reasons of manageability of the CA
Parameters for Acceptance of the
Pilot Phase
• The EVALUATION for the Pilot Phase shall be based on its strict compliance
to the Building Code and Batas Pambansa Blg. (BP) 220, the existing
technical standards for socialized horizontal and/or medium-rise vertical
housing projects promulgated by DHSUD, and other related laws and local
ordinances
Requirements:
Non-acceptance of the Pilot Phase and
Continuance of the Subsequent Phases
1. Non-submission of the documentary requirements
2. Non-conformity to the approved plans and specifications; or
3. Refusal to rectify the non-compliance of specifications of
building design.

In case the developer fails to submit the required licenses,

SHFC shall not release the loans for the completed housing
units. This is without prejudice to the filing of any civil,
administrative, or criminal cases for violation of applicable
laws and ordinances.
Dispute on Pilot Phase and Subsequent
Phases Inspection and Evaluation
Shall be subject to the following grievance process by the Engineering
Committee

1.The developer or CA may file a Notice of Dispute indicating its grievances

on technical aspects to the Engineering Committee;
2.The Engineering Committee will schedule a hearing between the developer
and the CA, together with SHFC RED;
3.The Engineering Committee will issue a resolution/recommendation not
later than fifteen (15) working days from the receipt of the Notice of Dispute.

The resolution of the Engineering Committee shall be deemed final and

executory.
Project Appraisal
Once the SHFC and CA have accepted the Pilot Phase, the
project shall be subject to a third-party appraisal.

The valuation of the external appraiser shall be submitted

to SHFC RED for review and validation of the parameters
provided under Section 4.1 and shall be valid for the
subsequent phases of the Turnkey CMP project.
Dispute on Appraisal/Valuation
• In the event that the developer or CA disputes or contests matters
arising out of or in connection with the appraisal/valuation report,
including any questions of its method or validity, the developer
or CA must submit a written “Notice of Dispute” to SHFC
within fifteen (15) working days from receipt of the
Appraisal/Valuation Report. After which, the SHFC Regional
Vice President shall set a meeting with the CA and the
developer to reconcile the figures of the property value.
Final Accreditation
After acceptance of the third-party appraisal, SHFC shall issue the Developer’s
Final Accreditation Certificate provided that the requirements stated
V. PROJECT TURNOVER AND
CLOSURE
This Section discusses the provisions fundamental for the
turnover of the completed housing units, and the
consequent release of loan proceeds to the SHFC-
Accredited Developer, as well as the procedures for
project closure.
Occupancy
• Upon receipt of the LGU’s Certificate of Occupancy and
the Certificate of Readiness to Occupy issued by SHFC,
the CA has sixty (60) days to occupy the units and start
the monthly amortization payments.
Loan Release
• SHFC shall release the loan proceeds for each of the
phases completed and accepted by the CA and SHFC.
The loan amount due for billing should only be the cost
corresponding to the phase being submitted for payment
by the developer.
Requirements:
Short Term Loan Facility
• To finance the working capital requirement of SHFC-
Accredited Developers for the construction and
completion of the approved housing project, a Short-
Term Loan Facility can be availed by through the
Development Bank of the Philippines (DBP) or the
Landbank of the Philippines (LBP). The loan terms and
conditions may be included in the executed
Memorandum of Agreement/Multi-Stakeholder
Agreement of the involved parties.
Release of Retention Money and
Project Closure
• The total cost of the project phase shall be subject to retention
of ten percent (10%). Such retention shall be released after six
(6) months and upon the SHFC-Accredited Developer’s
issuance of a Certificate of completion or rectification of the
defects listed in punch lists signed by all members, or issuance
of the required bond that is enough to cover the 10% amount of
retention and should be good for six (6) months.
• Additionally, the TCT for the last phase of the Turnkey CMP
project should already be transferred to the CA’s name. The
closure of the project must be communicated in writing by the
SHFC RED to SHFC Management/Branch/VP
Hub/Engineering Group.
Requirements:
Thank you!