CREBA hails 3% interest on home loans

The country’s largest organization of key real estate and housing industry players lauds the recent move of the Home Development Mutual Fund, known more popularly as the Pag-IBIG Fund, of lowering housing loan interest rate to three percent for minimum wage earners which it said would encourage home acquisition among the millions of low-income workers.

Under Pag-IBIG’s Affordable Housing Program (AHP), NCR workers earning a gross monthly income of not more than R15,000 and workers in other regions earning not more than R12,000 are eligible to avail of the lowest interest rate for a loan not exceeding R450,000. The rate is good for five years, subject to repricing.

National president Charlie A. V. Gorayeb of the Chamber of Real Estate and Builders’ Associations, Inc. (CREBA) said that indeed, government must provide an incentivized housing finance scheme as the millions of homeless poor, including the informal sector, cannot afford commercial lending rates.

To further boost this initiative, Gorayeb cited CREBA’s proposed bill pushing for the consolidation of a minimum of R350-billion fund all placed under a Centralized Home Financing Program (CHFP).

“The initial R350 billion for the CREBA-proposed CHFP will come from yearly bond issuances by the SSS at R5 billion, GSIS at R25 billion, a minimum of R70 billion up to a maximum of 70 percent of the PagIBIG Fund’s total investible funds for housing, R200 billion from the unused or residual agri-agra funds of banks, plus another R50 billion from the government’s annual budget,” Gorayeb explained.

The bill proposed by CREBA amends Republic Act 7835 or the Comprehensive and Integrated Shelter Finance Act (CISFA) of 1994.

Those fund sources, according to CREBA national chairman Noel Toti M. Carino, have already been identified by law, including the respective charters of the GOCC’s concerned, and need only to be integrated under the CHFP for effective administration to housing beneficiaries.

As proposed by CREBA, the CHFP shall be designed exclusively for financing assistance to borrowers for home loans, especially for socialized and economic housing, with no component for development loans, thus ensuring the use of the funds strictly for shelter acquisition by the homeless, estimated at a minimum of 5.7 million families nationwide.

Payable in 25 to 30 years, the loans for residential units in subdivisions or medium-rise condominium buildings shall be 1.5million and below at three percent fixed interest rate for socialized housing, and more R1.5 million up to R3,199,200 at four percent for economic housing.

All income-earning citizens, whether or not members of SSS, GSIS or Pag-IBIG, 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.

The operation of the CHFP shall be sustained from the funds pooled from mortgages, receivables and other securitized assets that the SSS, GSIS, Pag-IBIG Fund, the banking system and the national government shall continue to invest in with the mandatory guaranty cover from the Home Guaranty Corporation as to the principal and the two percent interest for all the issues.

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

CREBA envisions the CHFP to have two components where the Loans Program shall be put under Pag-IBIG Fund and the Securitization Program under the National Home Mortgage Finance Corp. (NHMFC). This proposed bill is the first in CREBA’s five-point agenda in pursuit of its vision of “A Home for Every Filipino.”