Question & AnswerQ&A (HDMF CIRCULAR NO. 329)
The primary objective of the Pag-IBIG Direct Developmental Loan Program is to increase the number of end-user availments by providing additional housing inventories through developmental financing.
The proceeds may be used for the development of residential subdivisions or medium-rise residential buildings and the construction of units eligible for mortgage financing under the prevailing guidelines of the Pag-IBIG End-User Home Financing Program. No part of the loan shall be used to purchase a parcel of land.
The developer/proponent must have an overall score of at least 70%. For horizontal projects, 60% of the score is based on financial performance and 40% on project evaluation; for vertical projects, 70% is based on financial performance and 30% on project evaluation.
The loan amount shall not exceed Two Hundred Fifty Million Pesos (₱250M) for horizontal projects and Five Hundred Million Pesos (₱500M) for vertical projects.
The interest rate is based on the result of the financial and risk evaluation of the developer.
The loan term shall not exceed three (3) years and is based on the cash flow projection of the project.
The loan is secured by a first real estate mortgage on the real estate property subject to development, which must be free from liens and encumbrances. Partial releases of collateral are allowed provided the loan-to-appraisal value remains at 70% after the release.
For horizontal projects, developers must have infused at least 20% of the prudent production cost; for vertical projects, 40% of the land development and building construction cost must be infused. Raw land value is considered part of the equity.
A penalty of 1/20 of 1% of any unpaid amount will be charged for each day of delay.
The developer must secure a Development Permit, Environmental Compliance Certificate (ECC) by DENR, DAR Conversion or Exemption, Clearance to Mortgage from the HLURB, and a License to Sell.
The processing fee is 1% of the approved loan amount or fifty thousand pesos (₱50,000), whichever is lower, inclusive of a non-refundable filing fee of ₱10,000.
Interest is paid quarterly with the first payment due at the end of the first quarter from initial loan release. Principal payments are made quarterly with the first due on or before the eighteenth month from initial loan release.
A default in one developmental loan automatically constitutes a default in any other direct developmental loan.
If the developer fails to commence construction within one year from Notice of Approval and fails to complete within the loan term, the loan shall be cancelled.
Yes, provided they meet the criteria for the new loan and the total debt evaluated does not exceed the Single Borrower's Limit.