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.
Another update is the lowering of borrowing rates. You can now borrow with annual interest rate of as low as 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.
And one more thing…
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. What Pag-IBIG loan guidelines should be updated? Please share us what you think by commenting below.
Source: Pag-IBIG FUND Housing Loan Primer – July 2015