SHDA, Pag-IBIG agree on P8-B loan releases

The Subdivision and Housing Developers Association (SHDA) and the Home Development Mutual Fund (HDMF or Pag-IBIG Fund) have recently signed a bilateral agreement to facilitate the release of some P8-billion worth of developer-originated housing loans which have accumulated prior to the assumption to office of the new Pag-IBIG Fund president and chief executive officer, Ramon Palma Gil.

The agreement adopts the Contract-to-Sell (CTS) as security for Pag-IBIG housing loans, which are convertible into a Real Estate Mortgage after the first two years of the loans, in case the borrowers do not default on loan payments otherwise the developer shall buy back the defaulted accounts.

The agreement was signed before the year ended by Ramon Palma Gil and Mariano Martinez Jr., SHDA national president.

This covers the take out or release of loan proceeds by Pag-IBIG Fund of developer-originated loans delivered to Pag-IBIG as of June 15, 1999 under the latter's Modified Guidelines for Pag-IBIG Expanded Housing Loan Program (HDMF Cir. 148), or under the Modified Guidelines for Pag-IBIG Homelending via Contract-to-Sell (HDMF Cir. 147), which accounts have not yet been issued Notices of Approval, or Letter of Guaranty by Pag-IBIG Fund.

Likewise eligible for financing under the said agreement are developer-originated accounts delivered to Pag-IBIG from June 15, 1999 to Dec. 31, 1999, which are covered under the most recent Modified Guidelines for the Pag-IBIG Expanded Housing Program (HDMF Cir. 171).

The agreement provides that Pag-IBIG Fund shall release the loan take out proceeds within 15 working days from the delivery of the CTS accounts to Pag-IBIG Fund, which shall have complied with all the conditions of the latter's Notice of Approval for the accounts.

For its part, the developer commits to answer for any defects except for normal wear and tear, on land development and construction of houses.

Under this warranty, the developers, at their own expense, shall correct, re-work and/or reconstruct houses or land development found to be defective and/or below specifications as determined by the Housing and Land Use Regulatory Board, within a period of 12 months from date of loan take out.

This is without prejudice to the provisions of Article 1723 of the Civil Code of the Philippine s of which the said developer agrees to bind itself solidarily with the housing project engineer, architect and contractor, as the case may be, for such defects.

Pag-IBIG Fund shall also have the right of recourse against the developer, including but no limited to, the buy-back of accounts, for breach of warranties and failure to covert CTS to real estate mortgage within 90 days from receipt of the HDMF notice, or for violation of pertinent laws and applicable Pag-IBIG housing loan guidelines and regulations during the two-year buy-back guarantee period.