Low interest loans for socialized housing

The country’s largest organization of real estate and housing industry players has urged anew for the passage of a bill that will allow all income-earning Filipinos to be entitled to low-interest, long-term housing loans.

More specifically, the Chamber of Real Estate and Builders’ Associations Inc. (Creba) wanted to amend Republic Act No. 7835, also known as the Comprehensive and Integrated Shelter Finance Act (CISFA) of 1994.

Creba national president Charlie A. V. Gorayeb explained in a statement that an initial P350 billion could then be made available and used for the proposed Centralized Homebuyer Financing Program (CHFP), which will ensure centralized funding and decentralized lending for socialized housing units.

Bond issuances

According to Gorayeb, the amount can be sourced from yearly bond issuances by the Social Security System (SSS) at P5 billion; Government Service Insurance System (GSIS) at P25 billion; a minimum of P70 billion up to a maximum of 70 percent of Pag-IBIG Fund’s total investible funds for housing; P200 billion from the unused or residual agri-agra funds of banks; and another P50 billion from government’s annual budget, all with mandatory guaranty cover from Home Guaranty Corp.

Those fund sources, added Creba national chairman Noel M. Cariño, have already been identified by law and need only to be integrated for effective administration to beneficiaries.

Creba explained that the CHFP shall be exclusive to borrowers of socialized and economic home loans, with no component for development loans. This would ensure that the use of funds would strictly be for shelter acquisition by the homeless, which was estimated to be at least 5.7 million families nationwide.

Fixed interest rates

Qualified borrowers can take out loans worth P1.5 million and below (for socialized hosing) for residential units in subdivisions or medium-rise condominium buildings, with a fixed interest rate of 3 percent. For economic housing, loans of more than P1.5 million up to P3.199 million will have a fixed interest rate of 4 percent.

All loans shall be payable for 25 years or more.

All income-earning citizens who qualify as beneficiaries under the Urban Development and Housing Act and who have not acquired housing assistance from any government institution shall be eligible for home loans through the CHFP.

“A secondary mortgage institution shall be organized by the government to lead this housing capital development effort to set in motion the country’s securitization program for housing,” Gorayeb said.

Creba has envisioned the CHFP to have two components namely loans program under Pag-IBIG Fund, and housing securitization under the National Home Mortgage Finance Corp. (NHMFC).

The proposed bill is foremost in Creba’s five-point agenda, which also covers affordable homes for employees in urban areas; lands for residential, commercial and industrial development; efficient housing regulations; and a full-fledged housing and urban development department.