housing

• Loan


  A sum of money lent at interest
• Foreclosure


  Legal action to bar a mortgagor's claims to property after default has occurred
• Collateral


  Property acceptable as security for a loan or other obligation
• Mortgage


  A temporary, conditional pledge of property to a creditor as security for performance of an obligation or repayment of a debt
• Amortization


  The systematic and continuous payment of an obligation through installments until such time as that debt has been paid off in full
• Development Loan


  Money loaned for the purpose of improving land by the building of streets and utilities so as to create lots suitable for sale or use in building homes
• Debt Service


  A term normally associated with commercial loans; it means the periodic payment of principal and interest
• Term


  The time limit within which a loan must be repaid in full
• Construction Loan


  A type of mortgage loan to finance construction, which is funded by the lender to the builder at periodic intervals as work progresses
• Types of Housing Loans by Filipinos

  • Private
  • Government
• Sources of Housing Finance - Private

  • In-house borrowing
  • Relatives, friends, etc.
  • Own resources
  • Housing cooperatives
  • Private company loans
• Sources of Housing Finance - Government

  • SSS
  • GSIS
  • HDMF/Pag-IBIG
  • PNB
  • LBP
  • Banks
  • Financial institutions
• In-House Borrowing (Private)


  1. The buyer pays the full down payment to the developer and submits loan documents to bank loan

  2. The developer keeps title under their name until the lot or house and lot (H/L) is fully paid by the buyer
• Borrowing From A Private Bank Not Under the Multi-Window Lending System (MWLS)


  1. The buyer pays the full down payment to the developer and submits loan documents to bank loan

  2. The developer or buyer submits the loan document to the bank for approval

  3. The bank checks the project site or housing unit. After the inspection, the bank approves the loan. The developer then transfers the title to the buyer's name (borrower). The bank releases the loan amount to the developer

  4. The buyer pays the bank monthly installments for the loan
• Problems and Issues in Housing Finance

  • Inelastic Housing Supply
  • High Land Multiplier
  • Financial Conditions
  • Regulatory Environment
  • Affordability
• PHL has the Highest Land Multiplier in Asia
• The cost of servicing raw land increases to 5x its amount
• Example: Price of agricultural land (outskirts of Metro Manila) = Php 60/sq.m. It rises to 2.5 to 3x when the same land is zoned for urban use. It further rises to 5.3 to 6.7x the zoned land price when the area is developed
• Inelastic Housing Supply


  Problems on the Land and Financial Markets. Land Market – inefficient land administration and management, i.e., legal and regulatory framework. Unreliable information re: land ownership, location boundaries, actual land uses, land values. Bureaucratic – sale and transfer of property rights, issuance of development permits and licenses, land tax collection
• Financial Conditions


  Limited sources of long-term funds restrict the supply of housing. The banking system has been reluctant to hold long-term mortgages as assets because of risks and thus, extends only to high-income households (HH) to minimize the risks. The low- to middle-income households have been largely dependent on gov't. social security funds which are limited and cater mainly to HH in the formal sector
• Limited options for Middle – to low income household
• Regulatory Environment


  Regulatory component of the housing program focuses on bldg. standards while land use and environmental measures have been inadequate. No national land use plan. Land use standards are based on city or town plans that are technically insufficient to guide
• Affordability


  Based on the loan amortization tables of HDMF/Pag-Ibig, SSS, GSIS, the majority of pension fund members will not qualify for loans even at subsidized rates. For a min. housing cost of Ph 150,000, only HH with an annual income of Ph 150,000 (Ph12,500 monthly) or higher can avail of a loan equal to Ph 150,000 even at subsidized interest rate of 9%