QuestionsQuestions (HDMF CIRCULAR NO. 344)
The circular provides guidelines implementing the Pag-IBIG Fund takeout mechanism for developer-assisted housing. Its objectives are: (1) to encourage developers to supply housing inventory for sale to Pag-IBIG member-buyers through a Pag-IBIG housing loan; and (2) to define parameters for allocating and disbursing funds specifically for developer-assisted housing loans.
Coverage is optional for accredited developers for six (6) months from the date of effectivity. Within that period, developers may still be evaluated under earlier circulars (Nos. 259, 287, and 298). After six (6) months, coverage becomes mandatory.
The MOA sets that: Pag-IBIG provides funding allocation upon compliance; the developer pre-processes and delivers applications of member-buyers for lots/houses/condo units in the developer’s project; Pag-IBIG approves eligible applications; both execute relevant sale documents (DOAS by Fund and DCS/loan documents for the member-buyer); the developer processes transfer of title to Pag-IBIG; the developer agrees to buy back accounts affected by breach of warranties; and the MOA is subject to cross-default provisions in pro-forma loan documents.
(a) A Deed of Absolute Sale (DOAS) is executed for the residential unit chosen by the member-buyer (executed by the Fund in favor of the developer or as stated in the mechanism, with the deed ultimately transferring the chosen unit as required by the structure). (b) The Fund executes a Deed of Conditional Sale (DCS) in favor of the member-buyer; where loan-to-value does not exceed 50%, the HL account may be a REM account and the developer executes a DOAS in favor of the member-buyer who then executes a mortgage in favor of the Fund.
It limits when alternative security/documentation structures are allowed. For example, it allows HL accounts to be treated as REM accounts when the loan-to-value does not exceed 50% (Section III.2.4). It also limits when a Real Estate Mortgage may secure an account when the loan-to-collateral ratio does not exceed 50% (Section III.6).
The first submission must be scheduled and must be carried out not later than sixty (60) calendar days from the date of signing of the MOA.
Applications are processed within fifteen (15) working days from submission of documents listed in the checklist. A Notice of Approval (NOA) is valid for ninety (90) days reckoned from receipt thereof.
If takeout requirements are not submitted within the prescribed period, the member may re-file subject to payment of the filing fee. If negative findings can be rectified, a Notice of Deficiency is issued; the developer has ten (10) working days from receipt to correct. If re-submitted beyond the 10-day period, the application is treated as a new application with payment of the re-filing fee.
Pag-IBIG issues a Notice of Disapproval stating the grounds. The circular does not automatically grant takeout; the member’s application is rejected based on eligibility criteria.
The developer may request advance evaluation of borrowers or inspection of completed units by submitting a written request to Pag-IBIG and paying the corresponding filing fee. The Credit Investigation Report (CIR), Buyer Validation Sheet (BVS), and receipt of filing fee must be submitted with the application, and the CIR and BVS are valid for six (6) months only.
Utilization is deemed based on the loan amount of applications submitted by the developer for the given quarter, not on the loan value approved. Any unutilized allocation at the end of each quarter automatically carries over to the succeeding quarter. However, any unutilized allocation by December of the year of signing is forfeited.
A commitment fee is charged if the developer fails to fully utilize its budget allocation in a given quarter, specifically when at the end of a quarter the developer cannot utilize at least 80% of its budget allocation. The fee is equivalent to 1/2% of the budget allocation for the succeeding quarter.
Takeout proceeds are released within three (3) working days from submission of complete documents enumerated in the Notice of Approval. The list includes items such as executed DOAS, individual TCT in the required name, DCS or loan and mortgage agreement (depending on title scenario), notarized promissory note, tax declarations, updated real estate tax receipts, occupancy permit, certificate of acceptance, and transfer tax receipt.
(a) Documentation: developer warrants that all submitted documents (including individual titles and corresponding deeds) are valid, binding, and enforceable in all respects. (b) Title/ownership: developer warrants it lawfully owns the property (or has authority in joint venture), that it is free from liens/encumbrances/adverse claims, and that title papers have no vitiating defects.
The defect period is within six (6) months from acceptance of the residential unit by the member-buyer. The developer is bound solidarily with the architect/contractor/engineer for defects (except those due to normal wear and tear), must be notified within a reasonable period after discovery, and must rework/repair defects within sixty (60) calendar days from receipt of notice/complaint.
Buyback value includes outstanding principal balance, unpaid interest, and penalties as of the date Pag-IBIG receives the Notice of Buyback. It bears interest at 8.5% per annum from date of receipt of Notice of Buyback due to breach until actual settlement, plus a daily penalty of 1/20 of 1% per day from expiration of the prescribed buyback period up to actual settlement.
Pag-IBIG may (singly or collectively) cancel the CSA, suspend acceptance of housing loan applications (member may apply directly to Pag-IBIG), or cancel the developer’s accreditation and bar the developer including key officers from future participation in Pag-IBIG lending programs.
Collection Performance = (Actual number of accounts that paid) / (Total enrolled accounts at the start of each month). If performance is greater than 95%, the CSF rate is 2.5%.