Tuesday, July 16, 2013


A special housing loan program newly launched for informal settler families (ISFs), who are to be relocated from danger areas, to in-city or near-city medium-rise building clusters, is also open to ISF groups registered as cooperatives with the Cooperative Development Authority (CDA).

Dubbed as "High-Density Housing Project Guidelines," and contained in SHFC Corporate Circular No. 13-026, the lending rules were issued by the Social Housing Finance Corporation (SHFC) last July 11, 2013.

The program provides up to P400,000 per loan to qualified ISFs at 4.5% interest rate per annum, and payable in 30 years.  This loan ceiling may be increased if the Housing and Urban Development Coordinating Council increases the loan ceiling for for Medium Rise buildings for social housing.

For easy reference, the said Circular is reprinted below:

A subsidiary of the National Home Mortgage
Finance Corporation

Corporate Circular No. 13-026
Series of 2013

                PROJECT GUIDELINES

     In accordance with the directive of President Benigno S. Aquino III and Vice President Jejomar C. Binay to eliminate poverty and homelessness, these Policy Guidelines are hereby promulgated.


     Republic Act 7279, otherwise known as the Urban Development and Housing Act of 1992, provides for the equitable utilization of residential lands in urban and urbanizable ares with particular attention to the needs and requirements of the underprivileged and homeless citizens through  the rational use and development of urban lands in order to bring about reduction in human dysfunction particularly those that affect public safety and the environment.

     The Aquino administration has allocated Php 50 billion for five (5) years for Informal Settler Families (ISF) Housing Project.  The ISF Housing Project aims to clear the easements along the waterways in Metro Manila of structures and provide in-city and near-site relocation for the affected families.

     It shall complement the Flood Management Master Plan of the Department of Public Works and Highways (DPWH) that shall impact on the Metro Manila population as well as the nearby cities.

     Executive Order No. 272 gave the Social Housing Finance Corporation the mandate to be the lead government agency to undertake social housing programs that will cater to the formal and informal sectors in the low-income bracket and shall take charge of developing and administering social housing program schemes.

     Its Articles of Incorporation authorizes SHFC to purchase, acquire, sell, discount, refinance or otherwise deal in community or home mortgages or participate therein or engage in estate management under such conditions and terms as may be determined by the Board of Directors of the corporation.

     In furtherance of its mandate and primary purpose, SHFC promulgates these guidelines to provide the implementation framework within which SHFC can participate in the ISF Housing Project and enable it to extend financing assistance to organized communities for the construction of high density housing projects.


     2.1  High Density Housing

            High density housing refers to a slum redevelopment strategy wherein a significant number of informal settler families are accommodated in multi-storey buildings.  This may be implemented by either an in-city or near-city site relocation or a land sharing arrangement.

     2.2  Partner - Stakeholders

     This refers to SHFC's stakeholders whose crucial partnership role in operationalizing the High Density Housing program makes it possible to fully and efficiently implement the project.  SHFC's partners are the following:

     2.2.1  National government agencies and local
               government units.

               This refers to government agencies who will be working closely with SHFC in the implementation of the Program:  formalizing networks and linking the program with the current initiatives; and the local government units who are vital in communicating the program to the community and/or integrating local development plans in the operational needs of the program.

     2.2.2  The Community Association (CA).

               An organized homeowners association or a cooperative duly registered with appropriate government entities, either with the Housing and Land Use Regulatory Board (HLURB) or the Cooperative Development Authority (CDA) and whose members meet the necessary eligibility requirements.

     2.2.3.  The Civil SocietyOrganizations (CSO).

                This refers to peoples organizations (POs), non-government organizations (NGOs) whose role is to assist the community associations in their organization; act as conduits between the community associations and SHFC; and monitor program developments.

     2.2.4.   The Private Sector.

                 This refers to private organizations and/or individuals whose role involves providing assistance in the form of funding, knowledge/expertise and training.


     The beneficiaries of the financial assistance are community associations of informal settlers who are living in danger areas and along the waterways in highly urbanized cities.


      The CA shall be responsible for the following:

       4.1.  Identification of ISFs beneficiaries of the project.
       4.2.  Comminity profiling survey.
       4.3.  Mobilization of community resources that will  
               respond to project needs.
       4.4.  Loan documentation.
       4.5.  Project planning and project management.
       4.6.  Estate management that will include collection of
               payments, maintenance of building and enforcement
               of community rules and regulations.
       4.7.  Payment of taxes and permits relative to project
               implementation and management.
       4.8.  Organizational maintenance.

               The CA shall partner with support organizations that will ensure the completion of the housing project as well as the efficient and effective estate management.


       5.1.  Type of Loans

       The SHFC shall provide financial assistance to Community Associations for the following purpose:

        a.  Land and Building Construction

             Loans for land may involve land acquisition and/or site development.  However, site development may be financed only if the loan entitlement can cover the loan.  The loan may be accessed either through a single line land and building construction loan or through a two-phased line availment.

         b.  Building Construction Only.

        The community association may avail of a loan for a building construction only if the land has either been donated, leased to or subject to a usufruct arrangement with the CA.  The lease contract or usufruct arrangement shall be for a period of at least 30 years.

         5.2.  Loan Entitlement

         The maximum amount of loan a community member can avail under the High Density Housing Program is P400,000.  This may be increased if the HUDCC increases the loan ceiling for Medium Rise Buildings for social housing.

        5.3.  Interest rate and loan term.

        The interest rate is 4.5% per annum or a maximum of 30 years.


     The CMP policy guidelines for land acquisition shall be adopted.  However, the subdivision plan and building permits shall now be a requirement for the building construction loan.


     The building standards shall be complied with.  The SHFC shall also review the capacities and credentials of the contractor.  A Performance Bond from the contractor or developer shall be required as a security for the completion of the building construction wok.

     A retention fee equivalent to 10% of the contract price shall be imposed and released only after a Certificate of Completion and Acceptance from the CA has been received and validated by SHFC.  The SHFC validation process shall be within a maximum period of 15 calendar days after receipt of a Certificate of Completion and Acceptance.


     The SHFC shall have the option to acquire/purchase the land and retain ownership of the same while allowing qualified families to acquire and pay only for the cost of the building.

     It may also opt to co-own the land, including the building and implement a public rental scheme to be adopted in projects wherein a significant number of families may not be able to afford the monthly amortization.


    9.a).  Modes of Amortization

     The repayment shall adopt a graduated scheme.  The graduated monthly amortization may adopt a scheme of an annual increase of 10% up to 10 years and a fixed amount starting on the 11th year.

      A grace period of one (1) month to pay the initial amount of amortization, reckoned from the time of occupancy of the building shall be granted to the Homeowners Association (HOA).

9.b).  Option to Avail of Rent-to-Own Scheme.

      The HOA, or any of its members duly registered as beneficiary hereof, may at the onset avail of the Rent-to-Own Scheme entitling the availee/s to the right-of-possession and enjoyment over the building or unit.

      The Rent-to-Own Scheme shall last up to five (5) years only, after which it shall be the legal obligation of the availee/s either to enter into a Contract to Sell with SHFC or voluntarily vacate the premises without need of any demand to do so.


       Mortgages shall be the security to loan.


       A subsidy scheme shall be developed to support the technical assistance to be extended for the High Density Housing Project.  The technical assistance may cover the following services:

       11.1.  Professional fees for the completion of technical plans
       11.2.  Community organizing for all of the phases
                 of the project.
        11.3.  Loan documentation
        11.4.  Capacity building for:

              11.4.1  Planning and designing
              11.4.2  Construction and Project Management
              11.4.3.  Estate Management
              11.4.4.  Organizational Maintenance

        11.5.  Taxes and permits


       Refinancing of ISF projects by local government units may be allowed pursuant to, and in accordance with the herein Guidelines.


       This Circular shall be effective and in force immediately upon its posting in the SHFC website.


July 11, 2013




Jean Agg wang said...
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Multi Credit Finance said...
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