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Pag-ibig Policies And Guidelines
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Pag-ibig Policies And Guidelines


Definition of Terms:
HDMF – Home development mutual fund, otherwise known as Pag-ibig
POP – Pag-ibig Overseas Program
CTS – Contract to Sell
REM – Real Estate Mortgage
CSA – Collection Service Agreement
OCT – Original Certificate of Title
CCT - Condominium Certificate of Title
PDC - Post Dated Checks
Buy Back Guaranty – A guaranty given by a Developer to HDMF that in case the
borrower is in default of payment, the former buys it back from the latter. In exchange of this guaranty, HDMF offers higher loan amount allowing buyers to produce less equity and makes the property more affordable.

1.1 Purchase of a fully developed lot not exceeding 1,000 square meters which should be within a residential area.
1.2 Purchase of lot and construction of a residential unit thereon.
1.3 Purchase of a residential house and lot, or condominium unit inclusive of parking slot, which may be old or brand new.

2.1 Must be a member for at least 24 months as evidenced by the remittance of at least 24 monthly contributions at the time of loan application.
2.2 A new member shall be allowed to make a lump sum payment of 24 months to avail of housing loan.
2.3 Not more than 65 years old at loan maturity and must be insurable.
2.4 Has the capacity to acquire and encumber real property
2.5 Has passed satisfactory background/credit check by the Developer and HDMF
2.6 Has no outstanding Pag-ibig housing loan, either as a principal or co-borrower
2.7 Has no outstanding multi-purpose loan in arrears at the time of loan application.

A qualified Pag-ibig member shall be allowed to borrow up to a maximum of P2,000,000.00 pesos which shall be based on the lowest of the following:
(1) The member’s actual need
(2) His loan entitlement
(3) Loan-to-collateral ratio
3.1 Loan entitlement based on contribution: For every P100.00 a member is
entitled to P125,000.00 loan amount. For example, a member has a monthly contribution of P800.00 he is entitled to P1,000,000.00 maximum loanable amount; and for P1,600.00 contribution, he is entitled to P2,000,000.00 maximum loanable amount.

POP contributions made in foreign currency shall be converted to its peso equivalent on the date when payment was made, rounded off to the nearest dollar.
For loans up to P500,000.00 which shall be secured by a first real estate mortgage or contract to sell on the property which is bought from a developer and are covered by a buy back guarantee, the member’s loan entitlement shall be based solely on his Pag-ibig contributions.
3.2 Loan entitlement based on capacity to pay:
A member’s loan entitlement shall be limited to an amount for which the
monthly amortization shall not exceed 40% of the member’s net disposable
income as supported by:
a) Latest income tax return (ITR) for the year immediately preceding the date of loan application with attached W2 form, stamped received by the BIR.
b) Certificate of Employment and Compensation (CEC) or pay slip where applicable. The net disposable income shall be the gross family income less statutory deductions and monthly amortizations on outstanding obligations.
3.3 Loan to Collateral ratio
Loan amount: with buy back guaranty without buy back guaranty
Up to P150,000.00 100% 100%
Up to P225,000.00 100% 100%
Up to P750,000.00 100% 90%
Up to P 1 million 90% 80%
Up to P 2 million 90% 70%

Loan Amount and Interest Rate
Up to P 300,000.00 = 6%
Over P300,000.00 up to P 750,000.00 = 7%
Over P 750,000.00 up to P2,000,000.00 = 10.5%
Additional 2% interest shall be imposed if payment is made after due date.
The interest rates on loans over P300,000.00 up to P2,000,000.00 shall be
Fixed for the first five years of the loan. At the beginning of the 6th year,
HDMF shall reprice the outstanding balance of loans based on prevailing
Market rates at point of repricing.

Loan Amount and Term of Loan
Up to P500,000.00 maximum of 30 years
Up to P2,000,000.00 maximum of 20 years

6.1 The loan shall be paid in equal monthly amortizations in such amounts as may fully cover the principal and interest as well as insurance premiums over the loan period and shall be made whenever feasible, through salary deduction.
(a) The borrower shall execute authority to deduct the monthly loan amortizations from his salary and shall secure the conforme of his employer for the purpose.
(b) HDMF and the employer shall enter into a collection agreement stipulating among others, that the deduction for the employee’s Pag-ibig housing loan shall have priority over other obligations of the same nature after all statutory deductions have been effected.
6.2 The monthly amortization shall include the borrower’s Pag-ibig
contributions in excess of the mandatory contributions as provided in 3.1
6.3 The first monthly amortization shall be deducted from the loan take out
proceeds and succeeding monthly amortization shall commence on the month immediately following loan take out and shall be paid on that day of the month thereafter.
6.4 The monthly amortizations shall be paid to HDMF through any of the
following modes:
(1) Accounts covered by a buy back guarantee:
a) Over the counter
b) If the developer has CSA with HDMF, payments shall be remitted to the Developer.
c) Salary deduction
d) Issuance of PDC initially to cover the 12 monthly amortizations. The Developer with CSA with HDMF shall safe keep the PDC’s, otherwise these PDC’s shall be in the possession of HDMF.
e) Auto debit arrangement with banks.
(2) Accounts not covered by buy back guarantee:
a) Salary deduction
b) Issuance of post dated checks initially to cover the 12 monthly amortizations
c) Auto debit arrangement with banks

The loan shall be secured by collateral consisting of the same residential properties to which the loan proceeds are applied.
7.1 For loans which are covered by a buy back guaranty and are secured by properties which are bought from developers, the security shall consist of a First Real Estate Mortgage or a Contract to Sell (CTS) on the subject properties.
7.2 For loans which are not covered by a buy back guaranty and are secured by properties which are bought from developers, the security shall consist of a Contract to Sell on the aforesaid properties fully covering the payment of the obligation.
The loan however, may be secured by a First REM instead of a CTS, and exempted from the buy back provision from loan default, provided any of the following conditions are being complied with:
(1) The borrower pays the advance amortizations for 24 months
(2) The loan-to-collateral ratio does not exceed 70%.
7.3 For loans which do not belong to the category of developers’ accounts, the
security shall consist of a first REM on the subject properties and the property must be covered by an original OCT, TCT or CCT issued by the Register of Deeds, free from all liens and encumbrances and must be registered in the name of the borrower.
7.4 Accommodation mortgages shall be allowed only for borrowers who are
related up to the first civil degree of consanguinity provided that the owner shall constitute the first mortgage as accommodation mortgagor, to secure the borrower’s obligation or give the latter the special power to do so and the borrower shall undertake and sign as a co-mortgagor.
7.5 The real estate taxes on the property must be updated as of the quarter
Immediately preceding the date of loan application, and yearly thereafter during the term of the loan. HDMF shall require the borrower to submit a copy of the official receipt of the real estate taxes paid for the preceding year not later than April 30 of the succeeding year. Failure of the borrower to submit proof of payment shall render the outstanding loan due and demandable.
7.6 A preliminary appraisal may be taken prior to actual development upon the
request of the developer and payment of the corresponding appraisal fees.,
A collateral inspection to be undertaken upon completion of the house construction and land development for which a collateral appraisal report shall be issued.

8.1 A borrower shall be allowed to prepay his loan in full and in part without prepayment penalty
8.2 Accelerated payments – any amount paid in excess of the required monthly amortizations shall be applied automatically to the principal, unless otherwise expressly requested by the borrower. The treatment of the excess payment the borrower prefers must be noted properly in the Pag-ibig Fund receipt.

The borrower shall be considered in default when he or any of his co-borrowers fails to pay any three consecutive monthly amortizations and or monthly membership contributions and other obligations on the loan
9.1 For loans secured by Contract to Sell (CTS)
(a) Cancellation of CTS
(b) Call against the warranty of the developer to buy back the defaulting account.
9.2 For loans secured by REM
The outstanding loan together with accrued interest, penalties, fees and other charges shall be due and demandable, and shall constitute a lien on the Total Accumulated Value (TAV) of the member’s savings with HDMF.

The borrower shall pay the following fees and charges to HDMF.
P1,000.00 upon filing of application which shall be non-refundable if the loan is disapproved. Then P2,000.00 upon loan take out. Other expenses such as appraisal fees, notarial and documentation fees, as well as taxes pertinent to the sale and transfer of the property to the borrower.

A Pag-ibig member may avail himself of a second Pag-ibig housing loan provided he has fully paid his first housing loan, whether as a principal borrower or as a co-borrower.

A qualified Pag-ibig member who has an existing housing loan may avail himself of an additional housing loan for the following purposes:
(a) house construction or improvement of a house constructed on a lot purchased through a Pag-ibig loan; or
(b) home improvement


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