Published: August 4, 2020 | Updated: February 10, 2021 | Posted by: Moneymax | Government Services
Many Filipinos long to have their own home. It may seem impossible, what with basic goods getting more and more expensive by the day. However, you can turn this dream into a reality with the help of the Home Development Mutual Fund (HDMF), commonly known as the Pag-IBIG Fund. Its main service, the Pag-IBIG Housing Loan, can be used for various purposes such as purchasing a house to making home improvements.
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Established in 1978, the Home Development Mutual Fund or the Pag-IBIG Housing Fund, is a government-owned agency under the Human Settlements and Urban Development department. It manages the national savings program and offers affordable house financing for Filipinos. You can get a housing loan from Pag-IBIG as an alternative to mortgages offered by banks.
Below are the two housing loan programs offered by Pag-IBIG:
This is the Pag-IBIG Fund’s regular housing loan program. Under this program, Filipinos can borrow up to PHP 6 million for a housing loan. You can also get multiple loans and apply with a co-borrower.
The Affordable Housing Program, on the other hand, caters to low and minimum wage earners. With this loan, you can borrow up to PHP 750,000 with a repayment period of up to 30 years.
Apart from buying your dream house, you can get a Pag-IBIG housing loan for the following purposes:
Pag-IBIG has two types of housing programs you can avail. Check the video below from Pag-IBIG for more details.
To be eligible for a Pag-IBIG housing loan, you should have the following:
Pag-IBIG requires other documents and fulfillment based on the purpose of the housing loan. Visit the Pag-IBIG Fund website to learn more about the different requirements.
The interest rate for Pag-IBIG’s regular housing loan is 5.375% per annum under a one-year repricing period and 6.375% for a three-year repricing period. Currently, the Fund is offering a special rate of 4.985% for a one-year repricing period and 5.375% under a three-year repricing period. However, these special rates are only offered until December 31, 2020.
For the Affordable Housing Program, the interest rate is at 3% per annum. This program is offered to low and minimum wage earners.
The maximum loan repayment term offered by Pag-IBIG is 30 years. However, you should not be more than 70 years old by the time of loan maturity.
Here are the steps to follow when applying for a Pag-IBIG Housing Loan:
Apart from the general eligibility and requirements, the documents needed depends on the purpose of your housing loan. Complete the specific checklist that applies to your purpose.
Once you’ve gathered all the requirements, fill out your HLA and submit it to the nearest Pag-IBIG Fund office. You can also file your housing loan application online, via Virtual Pag-IBIG. Pay the PHP 1,000 processing fee upon submitting your requirements.
Your NOA will be given only to you. If you’re an OFW borrower, it can be released to your attorney-in-fact. You have 90 days to sign your loan documents once you receive your NOA. If your application is rejected, you will get a Notice of Disapproval instead.
Before Pag-IBIG releases your check, you need to accomplish the following NOA requirements:
You have 90 calendar days to accomplish these steps.
You can receive your loan proceeds at the Pag-IBIG fund. Bring at least two valid IDS and present the following documents:
The Pag-IBIG housing loan approval time is within 17 days from the date you complete and submit all requirements.
To give you an idea of how the loan application works, here’s a rundown of the Pag-IBIG Housing Loan’s processing time:
As for the loan proceeds, you can claim it three days after complying with the Pag-IBIG fund’s post-approval process.
Before applying for a Pag-IBIG Housing Loan, consider the following tips to increase your chance of loan approval:
If you have an outstanding Pag-IBIG loan, you may not be eligible for a housing loan from the Fund. Pay off your overdue loan payments before submitting an HLA.
You should also keep track of your contribution remittance. Double-check if you’ve made at least 24 months of contributions before applying for a Pag-IBIG Housing Loan. If not, you can make a lump-sum payment for your contribution if you have been a Pag-IBIG member for at least 12 months.
Your income source plays a huge role in your housing loan application. The Fund will evaluate if you are financially stable and can afford to pay your monthly mortgages. Ideally, you should have a steady stream of income for at least two years before applying for this loan.
Assess your finances to figure out how much you can realistically shell out for your monthly mortgage payment. It shouldn’t exceed 30% of your gross monthly income. For example, if your gross pay is PHP 45,000 a month, your monthly home loan payment shouldn’t be more than PHP 13,500.
Additionally, you should be realistic about the type of house you want. If you have a family with only three members, perhaps a 6-bedroom home isn’t the best choice. If you want to live in the heart of the metro, you can settle for a condo unit instead. Knowing your housing needs can help you estimate the amount you need to borrow to purchase a home.
Read more: Condo vs House: Which Is a Better Buy?
Double—and even triple—check your documents. Make sure you have all the requirements, and there are no errors in them. Do this before submitting your HLA to avoid going back and forth to the Pag-IBIG office. Use the Pag-IBIG checklist to ensure you have all that you need for the housing loan application.
Pay off your credit card and other loan debts since Pag-IBIG does credit investigation. If you have any delinquency in your credit history, you’re less likely to get approved for a Pag-IBIG Housing Loan, or any loan for that matter.
If you have an unstable source of income or it isn’t enough to qualify for a Pag-IBIG Housing Loan, consider applying with a co-borrower. However, they must have a stable source of income and a spotless credit history to improve your chance of getting your loan approved.
Pag-IBIG allows two or three members, including the primary borrower, who are up to second-degree relatives to apply for a housing loan. However, this only applies to the End-User Financing Program.
A Pag-IBIG Housing Loan can help you purchase your dream house. Before submitting your application, ensure that you are qualified and have the documents required. You should also crunch the number and figure out how much you can afford for the monthly mortgage payments. If you can’t afford the home loan on your own, consider getting a co-borrower. Always pay your loan repayments on time to avoid the risk of your home loan getting canceled or your property being foreclosed.
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