Declaration of State Policy
- The State commits to continuously pursue urban land reform and affordable decent housing for underprivileged and homeless citizens.
- Establishes a loan restructuring and condonation program considering borrower creditworthiness, credit discipline, and lender financial viability.
Coverage of the Restructuring Program
- Applies to socialized and low-cost housing loans within HUDCC-set loan ceilings.
- Involves government financial institutions (GFIs) including GSIS, SSS, Pag-IBIG Fund, NHMFC, SHFC, HGC, and NHA.
- Covers loans with at least three months of unpaid amortization as of Act effectivity, regardless of prior restructuring.
- Maximum original principal loan amount covered is P2,500,000, with annual adjustments by HUDCC.
- No processing fee or downpayment required for loan restructuring application.
- Penalties, surcharges, and a reasonable portion of accrued interest are condoned upon restructuring approval.
- Remaining accrued interest treated as non-interest-bearing principal, repayable equally during the restructured loan term.
- Interest rates capped at original loan rate or 12%, whichever is lower.
- GFIs may condone penalties paid to funders due to Act implementation.
- Borrowers may use accumulated membership contributions to update payments.
- Loan terms may be extended up to age 70 of borrower.
- Foreclosure allowed after three consecutive missed payments under restructured loan.
- Borrowers’ legal heirs may assume loan payments in cases of permanent incapacity or death, subject to eligibility and full MRI application.
- Restructuring available only once, except for force majeure circumstances.
- Program is distinct from existing restructuring programs; borrowers may choose their preferred program.
Authority to Continue Program
- Governing boards of involved GFIs and agencies may continue restructuring and condonation beyond the initial 18-month period.
Exclusions from Coverage
- Loans with no payment since takeout; abandoned properties over one year; units occupied by third parties not authorized; foreclosed or cancelled accounts; and certain Pag-IBIG contract-to-sell accounts with buy-back guarantees are excluded.
Remedies Against Delinquent Accounts
- GFIs may foreclose on excluded or non-compliant accounts without newspaper publication.
- Auction notices must be posted in at least three public places and notice given to borrowers.
- Foreclosure applies if borrowers default after availing of restructuring benefits.
Incentives for Prompt Payment
- Borrowers who pay monthly amortizations on time are eligible for incentives, including interest discounts set by GFIs and housing agencies.
Implementing Rules and Regulations
- An interagency committee led by HUDCC and composed of all GFIs and agencies is tasked to promulgate implementing rules within 60 days.
Congressional Oversight Committee
- Composed of members from Senate and House committees on housing and urban development, appointed based on proportional party representation.
- The committee reviews and approves implementing rules, after which it ceases to exist.
- GFIs and agencies must submit annual reports to relevant legislative committees on program availment.
Repealing Clause
- Inconsistent laws, notably Republic Act No. 8501 (Housing Loan Condonation Act of 1998), and related orders are repealed or modified.
Separability Clause
- Invalidity of any provision does not affect the validity of the remaining provisions.
Effectivity Clause
- The Act takes effect 15 days after publication in the Official Gazette or two national newspapers.