The most accessible home financing is provided by the Home Development Mutual Fund which is popularly known as Pag-IBIG. It was first institutionalized in the 1970’s to answer the need for affordable shelter financing for Filipino workers.
Most of us consider owning our homes to be one of life’s most important milestones. Finally owning our home gives us a tremendous sense of accomplishment. However, this dream remains elusive to most Filipino workers because of the high costs of residential real estate. But this dream can be made possible through financing, either through banks or the Pag-IBIG.
WHO IS QUALIFIED TO APPLY FOR A LOAN?
To determine whether you are qualified to apply for a housing loan, consider the following questions:
- Have you made a total of at least twenty-four (24) monthly contributions to the Pag-IBIG Fund?
- Are you not more than sixty-five (65) years old at the time of the loan application
- Are you insurable at the time of loan application?
- Will you be not more than seventy (70) years old at the time of loan maturity?
- Do you have legal capacity to acquire or encumber real property?
- Do you have a good credit history?
- Are you currently gainfully employed or self-employed?
- Have you settled your previous Pag-IBIG housing loan, if any?
- Have you settled your previous Pag-IBIG multi-purpose loan, if any?
- If your answer is YES to all the preceding questions, then you are qualified to apply for a Pag-IBIG housing loan.
WHAT ARE THE MODES OF APPLYING FOR A LOAN?
There are two modes of applying for a housing loan:
Developer-Assisted: The developer assists the member in his housing loan application; and
Retail : The member applies directly to the Fund.
For a detailed listing of the documentary requirements for a Pag-IBIG housing loan, click here http://www.pagibigfund.gov.ph/benpro.aspx.
HOW MUCH CAN A MEMBER BORROW?
Members can borrow up to a maximum of SIX MILLION PESOS (P 6,000,000.00) which shall be based on the lowest of the following:
- The member’s actual need;
- The member’s loan entitlement based on his capacity to pay; and
- Loan to Appraisal value.
Loan to Appraisal value pertains to the appraisal of the property which shall be used as a collateral to the loan. A Pag-IBIG housing loan is a secured form of financing. As with other types of loans, a member promises to repay the loan based on the agreed payment schedule. The property which is subsequently purchased using the proceeds of the loan is then used as a collateral to back up that promise. When a member defaults on the loan, the collateral is foreclosed in favor of Pag-IBIG.
The ratio of the loan to appraisal value of the collateral shall be based on the loan amount applied for. For loans not exceeding P 1,250,000, the ratio used is 90%. For loans exceeding P 1,250,000 but not exceeding P 6,000,000, the ratio is 80%.
CAN PAG-IBIG HOUSING LOAN BE USED FOR ALL TYPES OF REAL ESTATE PURCHASES?
No, a Pag-IBIG loan shall not be allowed for the purpose of buying commercial properties. Housing loans shall be extended to members solely for the purpose of either:
Buying a fully developed residential lot or adjoining lots not exceeding one thousand (1,000) square meters;
Buying a residential house and lot, townhouse or condominium unit; or
Construction or completion of a residential unit on a lot owned by the member.
The decision to purchase a family home is a major step towards the fulfillment of a dream. It, therefore, requires careful planning and execution. Let a RE/MAX associate help you towards fulfilling your dream.
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