Here's all you need to know about Pag-IBIG Housing Loan.

Many Filipinos long to have their own home. Fortunately, for most of us, we can turn this dream into a reality with the help of the Home Development Mutual Fund (HDMF), commonly known as the Pag-IBIG fund.

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What is the Pag-IBIG Housing Loan?

Established in 1978, the Home Development Mutual Fund or the Pag-IBIG Housing Fund, is a government-owned agency under the Human Settlements and Urban Development department. It manages the national savings program and offers affordable house financing for Filipinos. You can get a housing loan from Pag-IBIG as an alternative to mortgages offered by banks.

Below are the two housing loan programs offered by Pag-IBIG:

End-User Financing Program

This is the Pag-IBIG Fund's regular housing loan program. Under this program, Filipinos can borrow up to PHP 6 million for a housing loan. You can also get multiple loans and apply with a co-borrower.

Affordable Housing Program

The Affordable Housing Program, on the other hand, caters to low and minimum wage earners. With this loan, you can borrow up to PHP 750,000 with a repayment period of up to 30 years.

Where can I use the Pag-IBIG Housing Loan?

Apart from buying your dream house, you can get a Pag-IBIG housing loan for the following purposes:

Purchase a residential house and lot, condo unit, or townhouse
Buy a fully developed residential lot or adjoining lots of not more than 1,000 square meters
Home improvement or alteration of an existing unit which will improve the house’s durability and value
Construction or completion of a residential unit
Refinance an existing mortgage with an institution acceptable to the Pag-IBIG Fund
And to combine loan purposes, limited to:

Purchasing a fully developed lot of up to 1,000 square meters and building of a residential unit thereon
Purchasing an old or new residential unit with home improvement
Refinancing an existing home loan with home improvement
Refinancing an existing mortgage, particularly a lot loan, with the construction of a residential unit thereon

RELATED: How to Verify Your Pag-IBIG MID Number (7 Ways to Check or Retrieve)

ATTRACTIONS TO SEE IN MANILA

Pag-IBIG Housing Loan Eligibility

To be eligible for a Pag-IBIG housing loan, you should have the following:

Remittance of monthly contributions for 24 months under Pag-IBIG I, Pag-IBIG II, or Pag-IBIG Overseas Program. If you have less than the required number of contributions, you can make a lump sum payment as long as you have been a contributing member for at least a year
You are not more than 65 years old by the time of loan application
You are not more than 70 years at loan maturity
Passed satisfactory checks Pag-IBIG
Has no outstanding Pag-IBIG loan in arrears
Had no foreclosed, canceled, or bought back Pag-IBIG Housing Loan due to default or was subjected to dacion en pago. This includes cases where a borrower no longer wants to process the loan ultimately surrendering the property.

Pag-IBIG Housing Loan Requirements

Completed Housing Loan Application (HLA) form
Recent ID photo of borrower and co-borrower, if applicable
Proof of income
One valid ID of primary borrower and spouse or and co-borrower and spouse, if applicable
Photocopy of Birth Certificate, if single
Photocopy of Marriage Certificate, if married
Certified true copy of Transfer Certificate Title
Transfer Certificate of the land and certified true copy of the Condominium Certificate of Title (for condo units)
Tax declaration and updated real estate tax receipt
Contract-to-Sell or a similar agreement between the buyer and seller
Sketch of the property or vicinity map
Health statement for borrowers over 60 years old and members availing of PHP 2 million to PHP 6 million housing loans

Pag-IBIG requires other documents and fulfillment based on the purpose of the housing loan. Visit the Pag-IBIG Fund website to learn more about the different requirements.

RELATED: List of SSS Loan Requirements

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Pag-IBIG Housing Loan Interest Rates and Term Periods

The interest rate for Pag-IBIG’s regular housing loan is 5.375% per annum under a one-year repricing period and 6.375% for a three-year repricing period. Currently, the Fund is offering a special rate of 4.985% for a one-year repricing period and 5.375% under a three-year repricing period. However, these special rates are only offered until December 31, 2020.

For the Affordable Housing Program, the interest rate is at 3% per annum. This program is offered to low and minimum wage earners.

The maximum loan repayment term offered by Pag-IBIG is 30 years. However, you should not be more than 70 years old by the time of loan maturity.

How to Apply for a Pag-IBIG Housing Loan

Here are the steps to follow when applying for a Pag-IBIG Housing Loan:

STEP 1. Complete the requirements

Apart from the general eligibility and requirements, the documents needed depends on the purpose of your housing loan. Complete the specific checklist that applies to your purpose.

STEP 2. Submit your HLA and pay the processing fee

Once you’ve gathered all the requirements, fill out your HLA and submit it to the nearest Pag-IBIG Fund office. You can also file your housing loan application online, via Virtual Pag-IBIG. Pay the PHP 1,000 processing fee upon submitting your requirements.

STEP 3. Wait for the Notice of Approval (NOA)

Your NOA will be given only to you. If you’re an OFW borrower, it can be released to your attorney-in-fact. You have 90 days to sign your loan documents once you receive your NOA. If your application is rejected, you will get a Notice of Disapproval instead.

STEP 4. Submit your NOA requirements

Before Pag-IBIG releases your check, you need to accomplish the following NOA requirements:

Pay for capital gains tax and documentary stamps at the Bureau of Internal Revenue (BIR)
Pay for transfer tax and transfer of tax declaration at the local government unit
Go to the Registry of Deeds for transfer of the title and annotation of mortgage

You have 90 calendar days to accomplish these steps.

STEP 5. Get your loan proceeds

You can receive your loan proceeds at the Pag-IBIG fund. Bring at least two valid IDS and present the following documents:

Transfer Certificate of Title or Condominium Certificate of Title in your name with mortgage annotation
Updated tax declaration and tax real estate receipt in your name
Occupancy permit
Assignment of loan proceeds
12 post-dated checks if you will not be paying your Pag-IBIG Housing Loan through salary deduction

RELATED: How to Apply for SSS Business Loan (Requirements & Eligibility)

How long does Pag-IBIG Housing Loan take until approval?

The Pag-IBIG housing loan approval time is within 17 days from the date you complete and submit all requirements.

To give you an idea of how the loan application works, here's a rundown of the Pag-IBIG Housing Loan's processing time:

2 business days - endorsement of submitted documents for credit investigation and property appraisal
3 business days - reviewing of the result of credit investigation and property appraisal
8 business days - approval of housing loan application
1 business day - receiving of housing loan application and release of Notice of Approval (NOA)
3 business days - preparation of Request for Payment (RFP) up to check availability and release

As for the loan proceeds, you can claim it three days after complying with the Pag-IBIG fund's post-approval process.

How to Pay for Your Pag-IBIG Housing Loan

Salary deduction through Employer Collect Servicing Agreement (CSA)
Post-dated checks
Auto debit arrangement with banks
Payment to an accredited Developer with CSA with the Fund
Accredited local and overseas collection partners

RELATED: How to Pay for Pag-IBIG Fund Contribution Using GCash (Transaction Fee & Timeframe)

Other Pag-IBIG Fund Members Benefits

Pag-IBIG Housing Loan: Guide to Philippine's HDMF (End-User Financing & Affordable Housing Programs)