Amendment to Home Ficing Act

The Commission may issue bonds, debentures, securities, and notes with the President’s approval, after consulting the Monetary Board.
Issuance aggregate limit is tied to the total principal obligations insured plus the authorized Home Financing Fund.
Obligations bear interest up to 7% per annum and are redeemable at the Commission’s option.
Obligations are secured by the Commission’s assets including securities held under this Act.
These financial instruments are tax-exempt except for estate, inheritance, and gift taxes.
The Government of the Philippines guarantees full and unconditional payment of principal and interest.
Bonds are registered at the holder’s request under prescribed regulations.

The Commission insures qualified lending institutions against losses from property improvement loans.
Two loan classes exist:
1. Loans up to ₱10,000 for repair, alteration, or improvement of existing structures, repayable over up to 10 years.
2. Loans up to ₱20,000 for alteration, repair, improvement, or conversion of multi-family dwellings, repayable over up to 20 years.

Mortgages eligible for insurance must:
- Have principal obligations not exceeding ₱30,000 per family unit and 95% of appraised value for single-family residences.
- Mortgagors must be owners and occupants and have paid at least 5% of the appraised value in cash or equivalent.
- Alternatively, smaller mortgages up to ₱9,500 covering the appraised value are eligible without the 5% cash payment requirement.
Maturity must be satisfactory but not exceed 40 years.

Insured loans bear interest not exceeding 10% per annum exclusive of insurance premium charges.

Upon default, mortgagee conveys property rights and assigns claims to the Commission.
The mortgagee’s obligation to pay insurance premiums ceases.
Commission may pay in cash or issue debentures equivalent to the mortgage balance.
The outstanding balance includes unpaid principal, applicable fees, taxes, liens, and insurance premiums.

Debentures are executed in the Home Financing Commission's name and signed by the Chairman-General Manager.
They are negotiable, tax-exempt, secured, and fully guaranteed by the Government.
Interest rate on debentures does not exceed the principal obligation’s interest rate.
Interest is payable semi-annually.
Maturity is 10 years from issuance or shorter if linked to mortgage maturity.
Debentures may be used to pay insurance premiums.

"Mortgage" means a first mortgage on fee simple real estate or leases of not less than 40 years.
Mortgages secure advances or unpaid purchase price of real estate with associated credit instruments.
Includes trust mortgages and deeds of trust securing notes or bonds.

A wide range of institutions are authorized to invest funds in loans and credit under this Act.
All loans within the Commission’s ceiling made by government financing institutions must be insured by the Commission.
Participating mortgagee institutions must comply with Commission-approved terms.
Investments are guaranteed as to principal and interest by the Commission and the Government.
The Development Bank, GSIS, and SSS are authorized to constitute a secondary mortgage market.
They may purchase, service, and sell insured mortgages.
They may issue bonds and obligations secured by insured mortgages, subject to Monetary Board approval.
Such obligations are negotiable, tax-exempt, and guaranteed by the Government.
Interest income on insured mortgages is tax-exempt.

₱5 million is appropriated from the National Treasury to augment the Commission’s original funds.
The Act takes effect upon approval.