Law Summary
Loanable Amount Based on Loan-to-Appraised Value (LTV) Ratio
- The loan amount must not exceed specified percentages of the appraised value of the collateral.
- For loans up to the Economic Housing Limit, the maximum LTV ratio is 95%.
- For loans exceeding the Economic Housing Limit but up to P6,000,000, the LTV ratio is capped at 90%.
- For developer-assisted housing loans up to the prevailing maximum limit for socialized housing, the LTV ratio may be 100%, provided the developer has a License to Sell for a socialized housing project and the loan is for purchasing a residential unit.
Repeal and Continuation of Previous Guidelines
- Item Nos. 4.1.2 and 4.2.1 of Pag-IBIG Fund Circular No. 396 are repealed by this Circular.
- All other terms and conditions of Circular No. 396 that do not conflict with these provisions remain effective.
Effectivity of the Circular
- The Circular takes effect 15 calendar days after publication in the Official Gazette or a newspaper of general circulation.
Important Definitions and Concepts
- "Borrower" refers to the individual(s) applying for the home financing loan.
- "Gross monthly income" means the total monthly income before deductions.
- "Tacked loans" indicate loans applied for by multiple borrowers jointly.
- "Economic Housing Limit" refers to the threshold value defining categories of housing financing limits under Pag-IBIG Fund programs.
- "Loan-to-Appraised Value (LTV) Ratio" measures the proportion of the loan amount relative to the appraised value of the collateral property.