IMPLEMENTING RULES AND REGULATIONS (IRRs) ON REFINANCING OF LGU HOUSING PROJECTS UNDER THE HIGH DENSITY HOUSING (HDH) PROGRAM
Adopted: 31 March 2014
Date Filed: 02 June 2014
SECTION 1. Purpose – This Implementing Rules and Regulations,
hereinafter called the IRR, is formulated for the purpose of
implementing Section 12 of Corporate Circular No. 13-026, series of 2013
(High Density Housing Project Guidelines) which allows refinancing of
Local Government Units (LGU)’s housing projects for informal settler
families (ISFs) living in danger areas and along waterways.
SECTION 2. Definition of Terms – For purposes of this IRR, the following terms or words shall mean or be understood as follows:
a. Local Government Units (LGUs) – refer to provinces,
municipalities, cities, and barangays that apply for refinancing of
their local housing program initiatives.
b. Refinancing – refers to the financing, through the High
Density Housing Program of SHFC, of the previously LGU-financed
development and construction of Multi-Storey Buildings for informal
settler families.
c. Appraisal – refers to the property valuation made by SHFC,
or a qualified accredited private/external appraiser, of the value of
the housing project subject for HDH refinancing in accordance with
Section 11 hereof.
SECTION 3. Eligibility –
a. Local Government Unit
An LGU-financed project applied for refinancing shall have that LGU as
HDH Partner to assist the community association (CA) in its organization
and in post occupancy activities; thus, it is required to have a
department/unit that will handle the HDH project. Majority of its
operating staff shall undergo an orientation on the High Density Housing
program of SHFC.
However, for the LGU to be qualified for
subsequent refinancing, it must achieve a Collection Efficiency Rate
(CER) of at least 80% provided data is available, and a 100% occupancy
rate in its previous refinanced housing project with SHFC.
b.
Community Association – In addition to the eligibility requirements
provided under Section 6 of Corporate Circular No. HDH 14-001 (IRR for
HDH Program, Land Acquisition Loan), the community association must have
entered into a partnership with LGU and HDH partner and must have
applied for the HDH loan.
c. Member-Beneficiary (MB)
The member-beneficiary for the housing project subject of refinancing must possess the following qualifications:
1. Must be at least eighteen (18) years old
2. Must not be a previous beneficiary of any other housing program of the government
3.
Must be a resident of the waterways or living in danger areas as duly
certified by the Department of Interior and Local Government (DILG)
d.
Property/Housing Project
The property or housing project (land and building) applied for by the LGU should comply with the following conditions:
1. The title/s must be registered under the name of the LGU;
2. The land is classified as residential;
3. The title/s should be free from liens or encumbrances;
4. The project must comply with the standards set by BP 220 and other applicable laws, rules and regulations;
5. The project must have secured the necessary permits, licenses and
clearances from the appropriate government agencies; and
6. The building/s must be complete and ready for occupancy by the ISFs.
SECTION 4. Obligations of LGU as HDH Partner for the Post Occupancy Phase
In addition to the commitments devolved upon the LGU under Section 9,
Article XIII of the 1987 Constitution, Section 29 of RA 7279 otherwise
known as the “Urban Development and Housing Act”, and other applicable
laws, rules, and regulations, the LGU undertakes to provide to the
community association the following enabling acts, such as, but not
limited, to, those enumerated in Section 4 of the IRR for Accreditation
of CSO Partner for HDH Program:
1. Assists in developing community association governance structure.
2. Prepares plans and programs/projects for the communities to uplift the socio economic status of the members.
3. Prepares and submits loan documents.
4. Capacitates the community association in the implementation of community policies on estate and financial management.
5. Facilitates in the formation of the community association’s
committees for estate management, such as but not limited to Sanitation
Committee, Peace and Order Committee and Committee on Finance.
6. Ensures that the community association is fully aware of their
responsibilities in estate management by conducting regular meetings
with the community association and performance review.
7. Assists in the community association’s collection of monthly amortization to be remitted to SHFC.
8. LGU in partnership with the community association shall obtain
services of an estate management consultant when the LGU is unable to
undertake items i to vii.
9. Ensures the development and implementation of LGU’s Disaster Risk
Reduction Plan and Activities for the community association.
SECTION 5. Payment for the Property/Housing Project for
Refinancing – Payment for the property to the LGU shall be made under
any of the following schemes:
1. Staggered Payment:
a.
Partial payment of 50% of the refinanced amount, upon submission of
Letter of Guaranty (LOG) with conformity of the Landowner and submission
of the documentary requirements for the first 50% (as listed in Annex
“A”) as well as 100% occupancy of the units of the building.
b. Remaining balance of 50% of the refinanced amount, if the title
to the property is already transferred in the name of the community
association and has an annotation of the SHFC mortgage.
2. Full payment of the refinanced amount shall be released when all the conditions in Items a to b have been met.
SECTION 6. Loan Amount/Refinanced Amount – The loan amount or the
refinanced amount shall be: (a) sum of the loan entitlement of the CA
members, or (b) project cost; or (c) the appraised value of the
property, whichever is lower.
SECTION 7. Loan Entitlement for the Refinance Loan under HDH –
The maximum loanable amount for refinancing for each ISF shall be
P450,000[1]. This may be
further increased if the Housing and Urban Development Coordinating
Council (HUDCC) increases the loan ceiling for Low Rise Buildings for
socialized housing.
SECTION 8. Interest Rate and Loan Term of the Refinanced Loan
Under HDH – The interest rate of loan for a community association is
4.5% per annum payable for a maximum period of 30 years.
SECTION 9. Amortization – The amortization payment of the
member-beneficiaries of the community association shall commence one
month after release of the first fifty percent (50%) or full release of
the loan, whichever comes first.
SECTION 10. Security for the Refinanced Loan under the HDH –
The loan shall be secured by a real estate mortgage (REM) annotated at
the back of the title/s of the community association.
SECTION 11. Appraisal of the Property/Housing Project – SHFC
shall adopt the generally accepted principles, practices and approaches
in the valuation of real properties and the CMP Appraisal Methodology
Manual approved by SHFC Board of Directors on July 27, 2006.
An appraisal conducted by accredited private appraisers may be
resorted to by the community association for consideration as basis of
the loan amount. However, SHFC shall only consider the appraisal of
qualified professional appraiser accredited by the Bangko Sentral ng
Pilipinas (BSP) or the government key shelter agencies, i.e. PAG-IBIG,
NHA. In any case, SHFC shall review and validate the applicability and
reasonableness of the appraisal value made, which SHFC may either
conform to or modify with its own appraisal value.
Should there
still be a disparity of expert opinion as to the applicability and
reasonableness between the appraisal values made, then SHFC may engage
the services of the professional appraiser accredited by aforesaid
government entities in order to reconcile the variance. Provided, that
in the event of irreconcilable variance then the matter shall be
elevated to the Board. (Section 5 of Corporate Circular No. HDH 14-001
series of 2013).
SECTION 12. Insurance –
a. Mortgage Redemption Insurance (MRI)
The insurance premium for the 1st
year of coverage shall be paid in advance which is equivalent to the
borrower’s share in the loan. Premium for the succeeding year shall be
paid on a monthly basis which shall be included in the monthly
amortization of the member-beneficiary.
b. Fire and Allied Perils Insurance (FAPI)
The house or unit and its improvements shall be covered by FAPI for an
amount equivalent to the loan amount. The insurance premium for the 1st
year of coverage shall be paid in advance which is equivalent to the
borrower’s share in the loan. Premium for the succeeding year shall be
paid on a monthly basis which shall be included in the monthly
amortization of the member-beneficiary.
SECTION 13. Documentary Requirements – The Checklist of
Requirements for application of the HDH refinancing is attached as Annex
“A”[*].
SECTION 14. Effectivity – This Implementing Rules and
Regulations (IRRs) shall be effective immediately upon publication by
means of posting the same in the SHFC website.
(SGD.) MA. ANA R. OLIVEROS
President
[1] Increased from P400,000 to P450,000 per HUDCC Resolution No. 1, series of 2013 dated October 16, 2013.
[*] Text Available at Office of the National Administrative Register, U.P. Law Complex, Diliman, Quezon City.