Title
OWWA Housing Program Guidelines for OCWs
Law
Owwa (dole) Memorandum Of Instructions No. 033, S.1993
Decision Date
Sep 14, 1993
The OWWA (DOLE) Memorandum of Instructions No. 033 establishes a housing program aimed at providing affordable housing and socio-economic support for Overseas Contract Workers (OCWs) through collaboration with the Home Development Mutual Fund and accredited developers, facilitating their reintegration and sustained productivity.
housing program
overseas contract
workers

Legal basis and policy direction

  • OWWA develops the housing program in response to a President’s pronouncement and pursuant to policy direction of the Board of Trustees to improve existing benefits.
  • The housing program is designed to provide affordable housing packages that subsume socio-economic corollary components as coping mechanisms for the gradual reintegration of OCWs and their sustained productivity.
  • Housing design standards must comply with Batas Pambansa (BP) 220.

Program scope and eligible beneficiaries

  • The housing program is implemented in collaboration with the Home Development Mutual Fund (HDMF) and other government institutions involved in similar undertakings.
  • The program applies to OCWs who are:
    • beneficiaries/members of OWWA, and
    • members of HDMF, Social Security System, or Government Service Insurance System.
  • The program includes eligible OCWs under the FILOW Program for the loan and equity financing guidelines:
    • OCWs must be FILOW Program members to qualify under the “General Guidelines” for the housing loan cycle.
  • The program supports acquisition and development of housing through mechanisms that involve land acquisition, new land development, partially developed land, and construction of housing units.

Program objectives and corollary components

  • The general objective is to provide mechanisms that help OCWs acquire housing units individually or in groups, enabling an exclusive self-reliant community of OCWs.
  • The specific objectives require:
    • affordable housing units consistent with BP 220 design standards;
    • socio-economic corollary components to serve as alternative sources of income for OCW families for sustained productivity; and
    • educational facilities, health and sanitation, environmental improvements, recreational structures, sports and cultural development, and other amenities within the village.
  • The corollary components include income generating projects such as:
    • village transport; and
    • grocery and similar projects.
  • The community must be supported by Community Development Officers (CDO) to facilitate formation of community structures, smooth implementation of programs and projects, and fostering of neighborhood groups.

Housing implementation strategy and agency roles

  • The program accelerates implementation through three strategies:
    1. Full development of an exclusive housing village;
    2. Allocation of a certain percentage of existing housing packages to OCWs; and
    3. Forging agreements with various developers.
  • Under these strategies, OWWA provides Equity Financing to assist OCWs in paying the equity portion while availing the housing program, enabling OCWs to obtain a second real estate mortgage usually with high interest.
  • OWWA, in pursuit of the program, enters into a Memorandum of Agreement with HDMF; the memorandum’s guidelines apply for execution under that arrangement.

Full development: functional roles and process flow

  • OWWA acts as the marketing arm through OWWA Overseas Centers.
  • OWWA Overseas Centers must perform:
    • information dissemination of program concept, implementing guidelines, and corollary components;
    • referral in coordination with the Field Service Office through the Overseas Programs Department;
    • market survey for marketing feasibility, with needed instruments and respondents made available by LPD-EBD in coordination with HDMF; and
    • organization of OCWs into groups following HDMF’s GLAD guidelines, with groups duly registered with proper agencies to vest legal personality (e.g., Securities and Exchange Commission, Bureau of Cooperative Development, or Home Insurance and Guarantee Corporation).
  • OWWA in coordination with HDMF must maintain an inventory of available units to facilitate referrals.
  • OWWA must extend Equity Financing and must act as lead executing agency coordinating financial and marketing operations.

HDMF and accredited developer duties

  • HDMF must provide:
    • financial assistance for land acquisition and housing development under GLAD or the Direct Development Loan Program;
    • technical assistance for market survey formulation, appraisal, and evaluation of the accredited developer’s costing estimates; and
    • certification of bona fide HDMF membership registration.
  • HDMF must ensure technical requirements adhere to BP 220, provide loan documentation support, and other relevant technical support.
  • The Accredited Developer (AD) must:
    • prepare subdivision schemes and detailed architectural and engineering plans;
    • undertake land development and housing construction;
    • ensure installation of basic utilities and services;
    • maintain the project until turn-over; and
    • secure necessary permits and clearances from government agencies.
  • OWWA must participate in HDMF’s Pre-Qualification, Bidding Committee to facilitate accreditation and land acquisition processes since OWWA lacks capability to accredit developers and appraise land.

Program management activities and development cycle

  • Program management activities and responsible centers include:
    • Negotiation with HDMF (OWWA/HDMF);
    • Market Feasibility Study (OWWA/HDMF);
    • Accreditation of Developers (OWWA/HDMF);
    • Financial Feasibility Study (HDMF);
    • Management Feasibility Study (OWWA);
    • Acquisition of Land (OWWA/HDMF);
    • Legal Feasibility (Developer);
    • Documentation/Permits & Licenses (Developer);
    • Technical Feasibility Study (Developer);
    • House Inspection (Developer); and
    • Mortgage Take-out (Developer); and
    • Turnover (Developer).
  • The housing loan development cycle requires:
    • program orientation (HDMF/OWWA);
    • presentation of housing packages (HDMF/OWWA);
    • OCWs complete trippings;
    • OCWs pay a reservation fee;
    • loan documentation by OCWs;
    • submission of the loan docket to HDMF;
    • HDMF evaluation;
    • HDMF approval/disapproval;
    • developer house construction;
    • developer house inspection;
    • developer mortgage take-out with the National Home Mortgage Financing Corp. (NHMFC); and
    • turnover by the developer.
  • The loan docket flow requires:
    • OCWs submit the loan docket to HDMF;
    • HDMF evaluates and approves/disapproves;
    • the developer performs mortgage take-out.
  • Process execution assigns all other processes (except accreditation and acquisition of land) to the respective partners as delineated.

Loan eligibility and documentary requirements (FILOW-related)

  • OCWs eligible for the housing program under the loan and equity financing framework are FILOW Program members who meet these requirements:
    • membership for at least 6 months;
    • at least 12 monthly contributions;
    • contributing membership upon loan application;
    • not more than 70 years old at the date of loan maturity;
    • legal capacity to enter into contract and purchase real property under Philippine laws; and
    • no prior housing loan other than lot purchase with the PAG-IBIG Fund, either as principal or co-borrower.
  • Documentary requirements for loan application include:
    • Pag-ibig Housing Loan Application with I.D. photo of borrower/s;
    • Income Tax Return (ITR) with W2 (Duplicate & 1 photocopy) or Contract of Employment or Certification from the Embassy regarding salary range for OCWs working in Europe and other countries where OCWs cannot file an ITR;
    • Certificate of Pag-ibig Premium Payment for the latest 12 months (original plus 1 photocopy);
    • Marriage Contract (2 photocopies), if applicable;
    • Residence Certificate (Husband & Wife, 2 copies);
    • Birth Certificate (2 copies);
    • Pay Slip for latest month (original plus 1 copy);
    • Special Power of Attorney, if applicable;
    • Certificate of Loan Eligibility;
    • Collection Servicing Agreement;
    • Tax Identification Number (1 photocopy);
    • Medical Questionnaire for loans once P200,000.00; and
    • Full Medical Examination for borrower over 60 years old;
    • other documents as HDMF may request.
  • Amortization payments must be computed/remitted to HDMF based on HDMF existing procedures.
  • Default basis/computation must follow HDMF existing guidelines.
  • Maximum loanable amount depends on monthly income:
    • US$1,000 monthly and below → maximum loanable amount of P250,000.00.
    • More than US$1,000 monthly → maximum loanable amount of P500,000,000.00.

Loan proceeds, term, and interest rates

  • Gross loan proceeds released by NHMFC must be net of insurance prepayments, which include:
    • Mortgage Redemption Insurance (MRI),
    • Fire Insurance (FI),
    • and the 2% Credit Insurance Fee (if applicable).
  • MRI is life insurance with borrower coverage under an automatic coverage system of an insurance pool, totaling 100% of the approved loan.
  • The borrower must obtain, through NHMFC, fire and allied insurance on the property mortgage equivalent to the appraised value of the house or improvement.
  • The maximum loan term must not exceed 25 years, and the borrower must not be more than 70 years old upon loan maturity.
  • Interest rates must follow this schedule:
    • P150,000 and below → 9% p.a.
    • Over P150,000 - P225,000 → 12% p.a.
    • Over P225.000 - P375,000 → 16% p.a.
    • Over P375,000 - P500,000 → 17% p.a.

Networking with developers (strategies 2 and 3)

  • OWWA must forge tie-ups with developers to apportion a certain percentage of existing housing packages to OCWs to meet immediate nationwide housing needs.
  • Developers fall into two categories:
    1. HDMF-Accredited Developers: OWWA provides initial Equity Financing to them; it may be extended to other developers in good standing based on recommendations of the Loan Programs Division, Economic Benefits Department.
    2. Developers in Good Standing: they must be certified by the House & Land Use Regulatory Board as bonafide developer and, while participating, may avail OWWA marketing assistance services.
  • Agreements with developers must include:
    • technical input provisions OWWA finds substantial for marketing the product;
    • discount provisions on the contract price of the house and lot package to OCW applicants, considering OWWA assumes marketing functions;
    • allocation of a certain percentage of available housing units to OCWs;
    • automatic reimbursement by the developer of the Equity Financing paid by OWWA if the OCW withdraws the approved housing loan application; and
    • information provisions relevant to OWWA’s evaluation of the applicant’s loan proposal.
  • Provincial-based developers must coordinate with Regional Units for participation with preliminary arrangements at the regional level, but the agreement must be executed at Central Office.
  • The forging agreement process requires:
    • invitation of developers (HDMF/OWWA);
    • orientation workshop (HDMF/OWWA);
    • screening of developers (HDMF/OWWA) with:
      • HDMF indorsement if accredited; and
      • HLURB certification if not accredited with HDMF; and
    • forging agreement by OWWA.

Equity financing: purpose, limits, interest, and security

  • Equity Financing assists OCWs in paying the equity portion of the housing loan.
  • Equity Financing eligible borrowers are OCWs who:
    • applied housing loan with HDMF; and
    • made partial payments with accredited developers.
  • Equity Financing must have:
    • maximum loan term of two (2) years; and
    • assistance that depends on actual equity requirement but must not exceed P100,000.00.
  • Equity Financing interest rate must be 14% per annum.
  • Equity Financing must be used solely to finance the equity or portion of the equity, where equity is the contract price less the loanable amount granted by HDMF.
  • If the housing loan application is withdrawn after Equity Financing is availed, OCWs must pay Equity Financing interest from the date the check was issued until the entire amount is returned to OWWA.
  • Late payments must incur 2% monthly penalty charges.
  • Security requires OCWs to issue post-dated checks corresponding to monthly amortization due covering the whole loan term and payable to OWWA; appropriate charges must be filed for checks issued with insufficient funds.
  • Amortization payment must commence a month after Equity Financing is released.
  • Post-dated checks must not be applied to OCW accounts; they must be cancelled once actual cash payments are made at the Internal Management Service Office for NCR applicants or at the Regional Units for regional clients.

Equity financing procedures and approvals

  • Equity Financing applications must be filed at the Regular Loans Programs of the Field Services Office for National Capital Region applicants or through OWWA Regional Units.
  • Application documents must be submitted as follows:
    • Application Form;
    • FILOW Membership;
    • authenticated Xerox copy of the Official Receipt issued by the accredited developer for initial down payment; and
    • Promissory Note.
  • Evaluation must be conducted by:
    • checking completeness of documentary requirements; and
    • checking with the accredited developer confirming the OCW’s loan application.
  • After evaluation, the loan docket must be forwarded to the Director of the NCR or the Regional Supervisor for regional applicants for final approval.
  • Voucher preparation must follow existing procedures adopted.
  • Check preparation must follow control measures requiring the check be payable to the accredited developer on account of the OCW applicant.
  • Check release must occur only upon receipt of post-dated checks issued by OCW applicants securing the loan.

Filing charges and estafa enforcement process

  • OWWA must send duly registered demand letters to respondents for at least three (3) times giving enough time to settle the account.
  • If respondents deliberately fail to settle after the demand letters, OWWA must, through its legal officer, file an estafa case with the Fiscal’s Office (FO) by filing a sworn statement charging the respondents with the offense, subscribed by the offended party, within twenty (20) days after the third collection letter is sent.
  • The FO must furnish the respondent a copy of the complaint for the respondent to answer within fifteen (15) days upon receipt.
  • The FO must study the case and conduct a preliminary investigation; if probable cause exists, the case must be filed with:
    • the Regional Trial Court (RTC) if the amount is P20,000 or more; or
    • the Municipal Trial Court (MTC) if the amount is less than P20,000.
  • If, after preliminary investigation, the respondent pays accountabilities, the case must be automatically closed.
  • If the respondent promises to pay within a specified period not exceeding (1) month but fails to comply, the case must be pursued, and the respondent must execute a promissory note with a corresponding penalty clause.
  • If payment is made as promised, OWWA must inform the FO.
  • If the respondent fails to pay despite promises, OWWA must file a petition for issuance of a Warrant of Arrest with the MTC or RTC as the case may be.
  • OWWA must ensure that PNP-CIS or NBI is furnished copies of the warrant for service.
  • If the respondent absconds, OWWA must publicize in a newspaper of general circulation the case against the respondent for whereabouts.

Equity loan development cycle and check handling

  • The equity loan development cycle requires:
    • program orientation (OWWA);
    • loan documentation (OCWs);
    • evaluation (OWWA);
    • approval/disapproval (OWWA);
    • voucher preparation (OWWA);
    • check preparation (OWWA); and
    • check releases (OWWA).

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