Lower interest for restructured socialized housing loan

Interest rates for restructured housing loans of Cebu City’s socialized housing beneficiaries have been reduced to six percent from nine percent.

This after the City Council approved the amendment of Section 3 of City Ordinance 1998 or the Cebu City Housing Loan Restructuring and Penalty Condonation Ordinance of 2004.

Under this section, the interest rate of restructured loan shall be six percent (6%) per annum, payable in five, ten, or 15 years at the option of the borrower.

Councilor Alvin Dizon, the chairman on the committee on housing, proposed the amendment of the ordinance in order to provide decent and affordable housing for its urban poor constituents through its Socialized Housing Program.

The amendment also aims to conform to the Home Development and Mutual Fund Circular No. 247 of the National Government which states that loans of up to P400,000 will have an interest rate of six percent.

“There is a need to lower the present interest rate of the city’s socialized housing program to be in line with the national government’s thrust of making socialized housing more affordable to qualified beneficiaries,” the amended ordinance states.

The Socialized Housing Program has already distributed hundreds of subdivided lots to qualified socialized housing beneficiaries through their duly organized community association, payable within a prescribed period.

But it has been observed that among the reasons beneficiaries failed to pay their monthly amorization is the fact that the accumulated penalties become an added burden.