Pag-IBIG never runs out of ways to make home buying easier for Filipinos.
On June 2015, Home Development and Mutual Fund, more popularly known as the Pag-IBIG Fund (Pag–IBIG is an acronym which stands for Pagtutulungan sa Kinabukasan: Ikaw, Bangko, Industria at Gobyerno), released updates of their housing loan guidelines for their affordable shelter financing program.
Their notable amendment is the removal of loan availment limit. Previously, you can only borrow a single housing loan even though you have the capacity to pay. Now, you can have multiple housing loan as long as one does not exceed 6,000,000 pesos (aggregate loan value — the outstanding balances of existing housing loans and the loanable amount of the new housing loan) and the resulting amortization payments for all loans are within the borrower’s capacity or income to pay. It is also applicable if one is a co-borrower for tacked loan. This is a welcome news for those who are restraint to acquire and build their real estate assets.
For the first year of the Pag-IBIG home loan term of up to P6 Million, eligible borrowers can now opt for the 5.5% per annum interest rate – the lowest rate the country’s biggest home loan provider has ever offered in their End-User Financing Program.
Pag-IBIG Fund has cut its rates in its home loan programs in the last five years and this is the fifth time it has made a major move. More so, aside from the new financial program, it also offers the Affordable Housing Program for minimum wage earners to encourage them to buy a home instead of spending money on rent.
Filipinos gained another reason to buy a decent shelter through the help of Pag-IBIG. Now that home loans under the regular program are even made more affordable, Pag-IBIG hopes to finance over 76,000 homes for 2016.
You can now borrow with annual interest rate of a 6.5% guaranteed interest rate for the next 3 years (comparable with bank financing), this will be repriced after 3 years. See above for other repricing periods. Choosing the comfortable repricing periods can mean interest payment savings or protection from rising interest rate risk.
Other updates like the Loan charges see above presentation and the Loan-To-Appraisal Value Ratio
(see below).
Loan to appraisal value ratio is one of the criteria in determining the borrower’s loan amount.
An excerpt from Pag-IBIG Fund Housing Loan Primer on Loan Amount:
A qualified Pag-IBIG member shall be allowed to borrow an amount up to 6,000,000, which shall be based on the lowest of the following: actual need, loan entitlement based on the capacity to pay, & loan-to-appraisal-ratio.
a) Loan Entitlement Based on capacity to pay
A member’s loan entitlement shall be limited to an amount where the monthly payment shall not exceed 35% of the borrower’s gross monthly income for loans not exceeding P 1.25 million and 30% of the borrower’s gross monthly income for loan over P 1.25 million.
For Government Employees who will be paying their loan amortization through salary deduction, their Net Take Home Pay must not fall below the minimum requirement as prescribed by the General Appropriations Act (GAA).
b) Loan-To-Appraisal Value Ratio (see above presentation)
The loan-to-appraisal value may be adjusted depending on the results of the Borrower’s Evaluation System.
For developer-assisted housing loans up to P450,000.00, the loan-to-appraisal value ratio shall be 100%; provided, the developer’s License to Sell is for a socialized housing project and the borrower’s housing loan purpose is for the Purchase of a Residential Unit.
For the purchase of Pag-IBIG Fund Acquired Asset, the loan-to-appraisal value shall be 100%.
A maximum of three (3) qualified Pag-Ibig members may be tacked into a single secured by the same collateral; provided, they are related within the second civil degree of consanguinity of affinity.
Non related co-borrowers may be also be allowed provided, co-borrower’s are co-owners of the property offered as collateral, and subject to the approval of the Branch Manager or higher level of authority.
You can now have your solar panel installation of your home financed by Pag-IBIG Fund through their Home Improvement Loan. A welcoming news for those who want to participate and bring the renewable energy/green technology in their homes as this will decrease dependence on the power grid and contribute to the lowering of electricity bill in the long run.
Know more about your housing loan options by visiting their webpage or their nearest Pag-IBIG office.
Source: Pag-IBIG FUND Housing Loan Primer – July 2015, Pag-IBIG’s official Press Release - 2016
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