Taking out a loan is one of the most practical ways of acquiring some life essentials — such as a loan for a car, tuition, or personal needs. Possibly the most common and arguably the most availed loan is a housing loan.
Having your own house is everyone’s dream, but the cost could be too high for most. An optimal way to achieve this goal is to get a housing loan, typically from one of three sources — in-house financing, through a bank or cooperative, or through PAG-IBIG Fund.
The PAG-IBIG Fund, or the Home Development Mutual Fund, is a Philippine government-controlled corporation that provides affordable shelter through financing. It also offers a national savings program and a range of loans to members in good standing. In fulfillment of its mandate, a PAG-IBIG housing loan lets you purchase a condominium or townhouse unit, fully-developed land, a house and lot, or other residential properties.
Sean Martin D. Plantado, head of customer service at Digido.ph notes that at Summer Pines Subdivision, availing of the PAG-IBIG housing loan is more accessible and more convenient as they provide assistance to PAG-IBIG members availing of the program.
Below is the stop-by-step process in applying for a PAG-IBIG housing loan:
1. Meet the criteria
The first requirement, of course, is to be a PAG-IBIG member, with contributions for at least 24 months or two years.
2. Prepare the documents
Getting a loan requires many processes and documents. Prepare your documents early and have them readily available for a hassle-free process.
Below are the documents you need to prepare:
Government Files and ID:
- Three copies of 1×1 ID picture
- Birth certificate and marriage contract if married
- 2 valid IDs: government-issued or company ID (photocopy 3 sets with three signatures)
- Spouse ID if married. If Oversees, visa ID or resident identity card
- Verified TIN from BIR
- 2 valid IDs with 3 signatures of spouse if foreign marriage
- Members Data Form
Work and Income files:
- Original employment certificate with compensation notarized (local and private employer only)
- A photocopy of the COEC and the POEA Overseas Employment Certificate (OFW). If COEC is original, include a photocopy of your employment.
- Employer’s contract (OFW)
- A photocopy of the Employment Contract (OEC) with an e-ticket from POEA (SEAMAN)
- A red ribbon SPA PAG-IBIG form or a notarized SPA PAG-IBIG form, along with a photocopy of a passport showing proof of admission and exit from the country (OFW)
- Most recent business permits, including mayor’s permit, DTI COR, three-year ITR with a BIR stamp, and detailed business sketch with landmark (self and local employed)
- Letter of Authorization for employment verification
- Most recent two-year bank statement with bank certification (online & commission basis)
- Original Paystubs for the most recent three months, signed by HR and the employer (government)
- For online jobs, Proof of Income Receipt converted to Philippine Peso like GCASH/ Paypal/ Bank Statement.
- Employee statement of accumulated value
- 2307 and company permits (commission basis)
- Three complete sets of the housing loan application, including the borrower’s ID photos
3. Processing of house loan
For loan processing, you will need to attend loan counseling and also accomplish land and property inspection. Additional documents for land property applications are the following
- Lot Plotting and Appraisal Confirmation
- Report by CI
- Original TCT/CCT with mortgage annotation (1 original copy)
- CTC of TCT/CCT with mortgage annotation (1 Certified True Copy)
- Original assignment deed bearing the SPA and RD stamp (2 copies) (FLH250-2a)
- Two copies of the original notarized promissory note (HQP-HLF-086)
- Tax declaration/affirmation for buildings/land (2 copies)
- Disclosure form (original and two copies) (HQP-HLF-085)
- Loan approval notice (NOA)
- Acceptance certificate/House and lot acceptance certificate (CHLA)
- Possession permit
- Time to develop for power or water supply projects (if applicable)
- Buyer’s compliance (If with water and power project) (HQP-HLF-371)
- Mortgage and loan agreement (7 initial signatures) (HQP-HLF-163)
- Deed of absolute sale, seven copies originals (HQP-HLF-237)
- Promissory note (3 original copies, signed) (HQP-HLF-087)
4. Loan release and monthly amortizations
Once you have submitted all the files and gone through the process, you will receive a call when your housing loan check is ready for release. All loan documents will be released directly to the developer. If your housing loan application is successful, then you have completed the process.
You will now need to pay the monthly amortizations to PAG-IBIG, and you can pay this through the following:
Through post-dated checks (PDC). You can issue 12 checks to PAG-IBIG, covering one year of monthly amortizations, for which you will receive an acknowledgment receipt. Be sure to safe keep the acknowledgment receipt for your records. Repeat the process after the 10th PDC has been used until your housing loan is fully paid.
Salary Deduction. You can opt for this method by submitting an authority to deduct to a specified branch. This method will continuously and automatically deduct the amount from your salary each month until amortization is fully paid.
Other methods of payment. Other methods include bank payment, accredited collection partners, and accredited developers.
FAQs for PAG-IBIG housing loan
How long does it take to process a PAG-IBIG housing loan?
The process usually takes about 17 days when you submit your loan application.
What does the date of loan maturity mean?
This refers to the date when your housing loan must be paid in full, and when your final loan payment is due.
What is the interest rate for a PAG-IBIG Housing Loan?
It depends on the full risk-based pricing framework and your chosen repricing period.
What is the PAG-IBIG Loan amount?
You can apply for a loan of up to 6-million pesos, but PAG-IBIG will only approve the amount needed for the house and your capacity to pay the loan.
Can a member with an outstanding PAG-IBIG housing loan apply for more loans?
You can apply for additional loans provided that you are up to date with your monthly payments.
Additional tips and advice
Have a good credit score. By showing that you are a regular and upright contributor, PAG-IBIG will consider this solid proof to approve your loan application.
Prepare your budget. Buying a house is an investment, and you should be prepared for the total cost. You must know how much you will need, and should not solely rely on the loan you will receive.
Look for a co-debtor. A co-debtor is an excellent backup to increase your chances of getting approval for your housing loan
Good employment history. You need a continuous job history to show you can pay. A gap in employment may indicate difficulties in holding a regular job with the possibility that you may not be able to pay the loan.
More information about PAG-IBIG
If you have more questions or you simply want to be more knowledgeable about PAG-IBIG housing loans in the Philippines, check out the link: https://digido.ph/articles/pag-ibig-loan-guide
What’s the next step?
When you have done all of the steps and procedures to apply for a housing loan and get approved, you can now start building and/or buying your dream house. Continuously paying the monthly amortization to complete the loan will increase your credit score, thus facilitating additional loans for your future investments.