There are a few government-approved agencies that provide housing loans for interested borrowers. This guide lists each option and reveals which would best suit a budding homeowner.
Congratulations! You’ll be making one of the biggest milestones that just about everyone dreams in their lifetime—buying a home. While you may have your eyes set on a certain property, your savings may not be enough to make the cut. Don’t fret just yet though, there are ways to finance your dream home, and it’s a common practice that almost every new homeowner does.
The Philippine government, through different agencies, offers affordable housing loans that make it possible for the working Filipino to grab the keys to their own home. Essentially, the government housing loans offered can be availed through memberships or monthly contributions. But which of them would best suit your lifestyle and financial state? To make it easier, here’s a rundown of four qualified agencies offering house loans that could be the perfect fit.
1. Social Security System (SSS) Housing Loans
When you think of the SSS, it’s usually the pension you’d get after retirement that you think of. SSS offers more than a monthly retirement benefit, they also provide benefits for business and housing loans. To date, they’ve given four options for housing loans that you can choose from:
A. Direct Housing Loan Facility for Workers’ Organization Members
This loan is specifically catered to provide low-cost housing for loyal members of workers’ organization members (WOMs). WOMs refers to DOLE, Securities and Exchange Commission, or Cooperative Development Authority-registered associations of workers in the private sector. Specifically, organizations such as trade union center, federation, national union, local/chapter or independent union as defined in Book V of the Labor Code of the Philippines.
B. Direct Housing Loan Facility for OFWs
If you are an Overseas Filipino Worker (OFW), you’re in luck as SSS has crafted a loan that is specifically for employees such as yourself. SSS pin-points for essential qualifications for this specific type of loan:
- You are currently employed overseas with a contract that has been processed through the POEA or one that has been authenticated by the Embassy of your country of employment
- Has the employment contract for renewal or deployment (Take note that the loan will only be offered upon renewal/employment)
- A Filipino that is already a citizen or immigrant of a foreign country but would like to buy a home for their family who lives in the Philippines
- Is currently an OFW with a long-term residency abroad but is planning to purchase a home for retirement or simply as a place of residence during visits in the Philippines
C. House Repair/Improvement Loan
If you currently own a home but feel like it needs to undergo a huge renovation or repair ordeal, this specific option is your best bet. The house repair/improvement loan covers those who want to upgrade their home’s aesthetic value expand their home, complete a bare unit, construct gates or (steel) fences, or is looking into installing deep wells or motor pumps.
This loan isn’t just available through SSS directly, they’ve also tapped accredited participating financial institutions (PFIs) as additional options. Currently, the listed PFIs are:
- BDO Unibank, Inc.
- Development Bank of the Philippines
- Land Bank of the Philippines
- Philippine National Bank
- Philippine Veterans Bank
- Planters Development Bank
(Kindly note that the list may be subject to change without official announcements from SSS)
D. Assumption of Mortgage
If all the aforementioned options aren’t suited to your state, the assumption of mortgage could be the best option. The Assumption of Mortgage provides loans to existing SSS members with good standing to assume the updated principal balance of an existing SSS loan.
However, it takes more than just being a current SSS member to make the cut. SSS specifies that to be eligible you must meet the following requirements:
- Is a current member of SSS with a contribution of at least 36 months, 24 of which were made consecutively in a period before applying for the loan
- Is not over 60 years old during the time of application
- Does not have an existing SSS housing loan
- Has not been granted final SSS benefits
- Is current in the payment of any other SSS loans (they also require for the applicant’s spouse to be updated with SSS payments as well)
2. Government Service Insurance System (GSIS) Housing Loans
Created by way of Commonwealth Act No. 186 that was passed in 1936, and later on amended under Republic Act No. 8291 in 1997, the Government Service Insurance System (GSIS) is a social security system for government employees. It ensures members against particular contingencies in exchange for their monthly contributions.
The institution does not directly offer housing loans as it did in the past and is presently focused on compulsory life insurance, optional life insurance, retirement benefits, disability benefits for work-related contingencies, and death benefits for its government-worker members. However, it does offer housing loan products via these two means.
A. GSIS Family Bank Home Loans
GSIS offers housing loans in a private capacity, via the GSIS Family Bank. GSIS currently owns a 99.6 percent stake in the bank, and through it offers housing loans to individual/single proprietors, employed individuals, OFWs, and partnerships and corporations.
B. Home Loans via PAG-IBIG
As GSIS decided to wind down its direct lending program due to lackluster housing performance of the pension fund, it decided to instead forge partnerships with key shelter agencies (KSA), which has the proven expertise on home lending. No KSA is more widely recognized than the Pag-IBIG fund, and GSIS signed a credit facility agreement and provided an initial allocation of Php5 billion to finance the housing loans of GSIS members and pensioners.
3. Pag-IBIG Fund Housing Loans
The Housing Development Mutual Find (HDMF)—better known as the Pag-IBIG Fund—is one of the most familiar and popular options when it comes to housing loans. They give financial assistance to its members looking to purchase their own home. Pag-IBIG has also been tapped by GSIS for house loan options since GSIS stopped its loan operations in May of 2016.
What makes Pag-IBIG Fund all the more attractive is the fact that their maximum loanable amount totals to P6million. Unlike options like SSS where each option provided has a maximum loanable amount of P2million. But if you’re wondering what modes you can choose from when applying for a Pag-IBIG housing loan, here are two:
If you’re looking to apply for a loan from Pag-IBIG directly, retail is the way to go. Just like other agencies that offer house loans, Pag-IBIG makes it possible for its members to get a loan too. They’ve made this option available for a wide array of workers—from private sector workers, OFWs or even self-employed workers. But before one is granted, there are a few requirements to be met:
- Must be a member under the Pag-IBIG I, Pag-IBIG II, or Pag-IBIG Overseas Program (POP) for at least 24 months and has made at least the same amount of monthly contributions at the time of application
- Is not over 65 years old at the time of application and must be insurable (Meaning the applicant is not older than 70 years at loan maturity)
- Has the legal capacity acquire or purchase real property
B. Assisted By Developers
Typically, when you purchase properties like condominiums, agents, brokers or developers are hands-on in assisting you. This also includes applying for house loans. The developer will walk you through as the buyer in applying for the said loan.
4. National Home Mortgage Finance Corporation (NHMFC) Housing Loans
The National Home Mortgage Finance Corporation (NHMFC) was built in response to the need for increasing the availability of affordable housing loans. Unlike SSS or Pag-IBIG Fund, the NHMFC is catered to the secondary market that operates or finances for home mortgages.
There is actually only one loan program that NHMFC offers which is the Housing Loan Receivables Program (HLRPP). This is directed more to financial institutions, developers, LGUs, cooperatives and other private sectors. They’ve created a program to help these organizations have more to lend to potential homeowners by liquidating their qualified housing receivables.
Aside from this, the HLRPP also looks into helping these organizations better manage their investment risk profiles and create more affordable housing loans with lower interest rates to eventually extend repayment methods for borrowers such as yourself.
5. Social Housing Finance Corporation (SHFC) Housing Loans
The Social Housing Finance Corporations (SHFC) was born out of the transfer of loan programs which was originally run by the National Home Mortgage Finance Corporation (NHMFC). The SHFC is concentrated on providing housing loans and financing for low-income families and informal settlers. Just like the NHMFC, the SHFC works with secondary markets such as LGUs undergoing housing projects to help those with lower incomes gain their own home.
These recipients can either receive SHFC-backed home-ownership or financing through four options:
A. Abot Kaya Pabahay Fund-Development Loan Program (AKPF-DLP)
Those who fall under the income family bracket living in an urban city can be helped through financing house or building construction via the AKPF-DLP. But these said homes must be part of the community mortgage program (CMP) or a specific housing project.
This is directed more towards corporations or LGUs that partner with developers of socialized housing projects.
B. Community Mortgage Program (CMP)
Legally organized Informal Settlers (ISF) of depressed areas can find help in financing their homes through the CMP. In a gist, this program seeks to help ISFs have the opportunity to improve their neighborhood by making it financially possible. Through this, they could eventually own their own homes.
The CMP cannot be a single person-application, it requires beneficiaries to form and register a Community Association to qualify. But how does each beneficiary receive rights over their property or land? It’s possible through a Lease Purchase Agreement (LPA) with the Community Association.
Core requirements are as follows:
- Must be at least 18 years old
- Cannot be more than 60 years old during the release of the loan
C. High-Density Housing Program (HDH)
SHFC has always been active in ISF Housing Program, with this the government provided them with P50 billion that is to be allotted for five years. So, the SHFC opted to create the High-Density Housing Program (HDH). Their main goal is to provide safe and flood-free homes for ISFs living within the National Capital Region (NCR).
D. Localized Community Mortgage Program (LCMP)
The LCMP works hand-in-hand with LGUs. This community mortgage program is designed for members of the LGU looking to acquire land which is primarily mortgaged to SHFC. Should the said city or municipality be qualified, they will be accredited by SHFC as partner LGU. Once this has been approved, those who fall under the qualifications can essentially receive any of the three acquisition loan options:
- P30,000 for site development loan (with a monthly amortization of P205.59)
- P100,000 for lot acquisition loan (with a monthly amortization of P685.30)
- P120,000 house construction loan (with a monthly amortization of 834.60)
Sources: sss.gov.ph, gsis.gov.ph, pagibigfund.gov.ph; nhmfc.gov.ph; shfcph.com