Pag-IBIG FundCorporate Headquarters

Petron MegaPlaza358 Sen. Gil Puyat Ave.,

Makati City

Circular No. 396

TO: ALL CONCERNED

SUBJECT: MODIFIED GUIDELINES ON THE Pag-IBIG FUND END-USER HOMEFINANCING PROGRAM

Pursuant to the approval of the Management Committee during its series of meetings, theModified Guidelines on the Pag-IBIG Fund End-User Home Financing Program ishereby issued:

1. COVERAGE

This Guidelines shall cover all retail and developer-assisted housing loanaccounts that will be processed and taken out upon its effectivity.

2. LOAN PURPOSE

The housing loan proceeds may be used to finance anyone or a combination of thefollowing:

2.1 Purchase of fully developed residential lot or adjoining residential lots notexceeding one thousand square meters (1,000 sq. m.);

2.2 Purchase of a residential house and lot, townhouse or condominium unit,inclusive of a parking slot, which may be:

2.2.1 Old or brand new;

2.2.2 A property mortgaged with the Fund; or

2.2.3 Adjoining houses and lots / townhouses / row houses / condominium units.

The subdivision project where said residential units are located must havecomplied with all the required facilities pursuant to PO No. 957 and BP No. 220.

2.3 Construction or completion of a residential unit on a residential lot owned by theborrower or a relative of the borrower based on Section 8.1.2 herein;

2.4 Home improvement on the house owned by the borrower or a relative of theborrower based on Section 8.1.2 herein, or on a property currently securedunder a Contract-to-Sell (CTS) or Deed of Conditional Sale (DCS) between'Pag-IBIG Fund and the buyer, i.e. any alteration in an existing residential unitintended by the borrower to be a permanent integral part thereof, which willenhance its durability and material value;

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2.5 Refinancing of an existing housing loan; provided, that the borrower must beregularly paying without any payment made beyond thirty (30) days pastdue for the last six (6) months from the date of application; or

2.6 For retail housing loan applications, purchase of residential lot or unit pluscost of transfer of title.

3. ELIGIBILITY REQUIREMENTS

To qualify for the Pag-IBIG Fund EUF Program, a member shall satisfy the followingrequirements:

3.1 On Pag-IBIG Membership

3.1.1 Must be an active member under the Pag-IBIG I Membership Programas evidenced by the remittance of at least twenty-four (24) monthlysavings at the time of application;

3.1.2 A member, whose monthly savings are still short of the requirednumber, may be allowed to apply for this program; provided, his totalsavings upon application is at least equivalent to 24 monthly savingsbased on the mandatory rate, inclusive of the employee (EE) and theemployer (ER) counterparts;

3.1.3 A non-member who wishes to apply for a Pag-IBIG Fund EUF Programmay be allowed to do so; provided, he remits the required24 monthly savings based on the mandatory rate in lump sum,inclusive of the EE and ER counterparts. Said lump sum amount shallbe considered a single remittance for the applicable month as of thepayment date;

3.2 Not more than sixty-five (65) years old at the date of application and not morethan seventy (70) years old at maturity;

3.3 Has the legal capacity to acquire and encumber real property;

3.4 Has passed satisfactory background/credit and employment/business checks ofPag-IBIG Fund;

3.5 If with existing Pag-IBIG housing account, either as prlnclpal buyer /borrower or co-buyer / co-borrower, it must be updated;

3.6 Has no outstanding Pag-IBIG Short Term Loan (STL) in arrears at the time ofapplication. A member whose STL is in arrears shall be required to update hisaccount; and

3.7 Had no Pag-IBIG housing account that was foreclosed, cancelled, bought backdue to default, or subjected to dacion en pago, which shall include cases wherethe borrower is no longer interested to pursue his housing account andsurrenders the property.

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4. LOANABLE AMOUNTA qualified Pag-IBIG member may apply for a housing loan of up to Six MillionPesos (P6,000,000.00), which shall be based on the lowest of the following: themember's actual need, desired loan amount, and loanable amount based oncapacity to pay and loan-to-appraised value ratio.

4.1. Loanable Amount Based on Capacity to Pay

4.1.1 All applications shall be evaluated based on the borrower's capacity topay.

4.1.2 The loanable amount shall be limited to an amount for which the monthlyrepayment shall not exceed thirty-five percent (35%) of the borrower'sgross monthly income for housing loans not exceeding P1,250,000.00,and thirty percent (30%) of the borrower's gross monthly income forhousing loans exceeding P1,250,000.00. In case of tacked loans, theindividual gross monthly income of the borrower shall be considered.

4.1.3 For government employees who will be paying their loan amortizationthrough salary deduction, their Net Take Home Pay must not fall belowthe minimum requirement as prescribed in the General AppropriationsAct.

4.1.4 Tacked Loans

A maximum of three (3) qualified Pag-IBIG members may apply fora tacked loan subject to the following conditions:

a. If the applicant members are related within the second civildegree of consanguinity or affinity:

a.1 The individual gross monthly income of those tacked into asingle loan shall be considered in determining their respectivecapacities to pay; and

a.2 Co-borrowers must likewise pass the eligibility requirementsprovided in this Guidelines. They shall be jointly and severallyliable with the principal borrower for the entire housing loanobligation.

b. If the co-borrowers are non-relatives, or are related beyond thesecond civil degree of consanguinity or affinity, in addition to therequisites provided under the immediately preceding section of4.1.4.a, the following conditions must likewise be met andcomplied, as follows:

b.1 The purpose of the housing loan is either for purchase ofresidential unit or lot, or purchase of lot with houseconstruction;

b.2 The subject property shall be registered in the names of allthe borrowers;

b.3 All the borrowers shall execute the REM; and

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b.4 The mortgage shall be released only upon full payment ofthe entire housing loan obligation.

Applications for tacked loans shall be subject to the approval ofthe appropriate level of approving/signing authorities.

4.2 Loanable Amount Based on Loan-to-Appraised Value (LTV) Ratio

4.2.1 The ratio of the loan amount to the appraised value of the collateral shallnot exceed the following:

Loanable Amount LTV Ratio

Up to 1,000,000a 95%Over P1,000,000up to the Economic 90%Housing Loan CeilingOver the Economic Housing Loan Ceiling 85%up to P6,000,000.00

a For developer-assisted housing loans up to the prevailing maximum limit forsocialized housing loan, the LTV ratio shall be 100%; provided, the developer'sLicense to Sell is for a socialized housing project and the loan purpose is for thepurchase of a residential unit.

4.2.2 For retail housing loans, the LTV ratio may be adjusted depending on theresult of the Borrower's Evaluation System (BES).

5. INTERESTRATE

5.1. Pag-IBIG housing loans shall be charged with interest rates based on the Fund'sFull Risk-Based Pricing Framework. Said interest rates shall be repricedperiodically depending on the chosen repricing period of the borrower.

5.2. An interest shall also be applied and charged from the initial release ofproceeds until the final and/or full release of proceeds (DV/Check Date), ifrelease of the proceeds of the housing loan is on a staggered basis.

6. LOANTERM

The housing loan shall be repaid at a maximum term of thirty (30) years and shall, inno case, exceed the difference between age seventy (70) and the present age ofthe principal borrower. The principal borrower shall be considered 70 years oldat the time he has reached his 70th birthday.

7. PAYMENTOF LOANAMORTIZATION

7.1 Mode of Payment

7.1.1 The housing loan shall be paid in equal monthly amortizations in suchamounts as may fully cover the principal and interest, as well as insurancepremiums, over the term of the loan, and shall be made, wheneverfeasible, through salary deduction. The borrower must however givehis/her consent in writing for the deduction of the amount of loanamortization from his salary.

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Pag-IBIG Fund and the employer may enter into a Collection ServicingAgreement stipulating, among others, that the collection of theemployee's Pag-IBIG housing loan payments shall be effectedthrough salary deduction and that the deduction for the employee'sPag-IBIG housing loan payments shall have priority over otherobligations of the same nature after all statutory deductions have beeneffected.

In case of salary deduction, an equivalent of one (1) month amortizationshall be deducted from the loan proceeds upon takeout. Said amountshall form part of the borrower's payment.

7.1.2 The monthly amortizations may also be paid to Pag-IBIG Fund throughany of the following modes:

a. Post-dated checks;

b. Payment to an accredited developer with a Collection ServicingAgreement with the Fund;

c. Accredited Collection Partners;

d. Auto debit arrangement with banks; or

e. Any other collection system which the Fund may implement in thefuture.

7.2 Payment Due Dates

7.2.1 The payment of the monthly amortization shall commence on the monthimmediately following the takeout date (DV/Check Date), and everymonth thereafter until full settlement of the housing loan.

7.2.2 In case of staggered releases, the payment date shall coincide withthe DV/Check Date of the final release of proceeds or theconstructive takeout date, whichever is applicable.

7.2.3 Should the due date fallon a non-working day in the Pag-IBIG branchwhere the housing loan is maintained, the monthly amortization shallbe paid until the next working day.

7.3 Partial payments shall be accepted but the unpaid portion of the amountdue shall be charged with the applicable penalty. Any amount paid by theborrower shall be applied in accordance with the order of priority underSection 7.5.

7.4 Any portion of the amounts due that remains unpaid after the due date shallbe charged with a penalty of 1/20 of 1% for every day of delay.

7.5 The monthly payment shall thus be applied according to the following order ofpriority:

7.5.1 Penalties,7.5.2 Insurance Premiums,7.5.3 Interest, and7.5.4 Principal.

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8. COLLATERAL

The Pag-IBIGhousing loan shall be secured by a collateral acceptable to the Fund,which, as a rule, shall consist of the same residential properties to which thetakeout proceeds are applied. An off-site collateral may be allowed formeritorious reasons subject to the approval of the appropriate level ofapproving/signing authorities.

8.1. For Retail Housing Loans

8.1.1. For retail accounts, the security shall consist of a First REM on thesubject properties fully covering the payment of the obligation asstipulated in the corresponding loan agreement and promissory note ofthe borrower.

8.1.2. Accommodation mortgages shall be allowed only for principalborrowers who are related to the accommodation mortgagor up tothe second civil degree of consanguinity or up to the first civildegree of affinity. The accommodation mortgagor and theborrower shall sign the REMas co-mortgagors to fully cover thehousing loan.

8.1.3. The Original Certificate of Title (OCT), Transfer Certificate of Title (TCT)or Condominium Certificate of Title (CCT) issued by the Register ofDeeds must be registered in the name of anyone or more of theborrowers. In case of Third Party REM or accommodation mortgage, thetitle shall be registered in the name of the accommodation mortgagor.

8.2 For Developer-Assisted Housing Loans

8.2.1 Contract-to-Sell (CTS)Documentation

The developer shall execute a CTSwith Pag-IBIGFund member tocover the purchase of the residential unit or lot used as collateralfor the Pag-IBIG housing account of the member subject to theprovisions of the Guidelines on the Pag-IBIG Fund TakeoutMechanism under the Developer's CTS/REM Scheme. Thedeveloper shall execute a Deedof Assignment assigning the CTSin favor of the Fund, which shall be annotated on the title of theproperty.

8.2.2 Deedof Conditional Sale (DCS)Documentation

a. The title of the subject property shall be transferred in the nameof the Fund. Costs for the transfer of title shall be for theaccount of the developer. However,upon the borrower's writtenrequest and provided that the LTV ratio does not exceed fiftypercent (50%),the title of the property may also be transferredin his/her name.

b. If the title of the property is transferred in the nameof the Fund,a DCSshall be executed with the borrower. In case the title istransferred directly in the name of the borrower, the developershall execute a Deedof Absolute Sale in favor of the borrower,who shall also execute a loan agreement and promissory notewith the Fund to fully cover his obligation.

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8.3 The property must be free from all liens and encumbrances except thoseprovided under Section 4, Rule 74 of the Rules of Court. In case no adverseclaim has been filed against the property and the said lien is still effectivewithin two (2) years from the settlement and distribution of the property,the developer/borrower shall put up a surety bond as security for theloan. To ensure that the surety bond is callable, the surety bond shall payfor the approved loan amount in case another person, including an heirof the registered owner, would lay a claim against the collateral propertyoffered as security. The surety bond must cover the remainingprescriptive period as of date of housing loan application.

In the event that the 2-year prescribed period had already expired and noadverse claim against the collateral property had been filed, the saidsurety bond shall no longer be required.

8.4 The subject property shall be appraised by Pag-IBIG Fund or its authorizedreprese ntatives/ age nts.

8.5 The real estate taxes on the property must be updated as of the quarterimmediately preceding the date of application, and yearly thereafter during theterm of the loan.

To ensure that the real estate taxes on the collateral property are updated, theborrower shall be required to submit a copy of the official receipt of the realestate taxes paid for the preceding year not later than June 30 of the currentyear and every year thereafter.

9. INSURANCE

9.1. The borrowers shall be compulsorily covered by Mortgage RedemptionInsurance or Sales Redemption Insurance (MRI/SRI), whichever is applicable.In the case of borrowers and co-borrowers, who are tacked into a singleaccount, each of them shall be covered by the MRI/SRI to the extent of theircorresponding obligation. The MRI/SRI premiums shall be the aggregate ofthe premiums corresponding to the housing loan granted to each borrower.

9.1.1. Interim Coverage

The interim MRI/SRI coverage shall take effect on the date of theissuance of the Notice of Approval (NOA)/Letter of Guaranty (LOG) byPag-IBIG Fund.

9.1.2. Regular Coverage

The regular MRI/SRI coverage shall be a non-medical yearly renewableinsurance for which the borrowers shall pay a uniform premium rateeffective on the date of takeout.

In the event of death or permanent / total disability of any of the borrowers,Pag-IBIG Fund shall apply the MRI/SRI proceeds to the entire outstandinghousing loan obligation, and the excess, if any, shall be paid to theborrowers or his heirs.

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9.2. The principal borrower shall obtain Fire and Other Allied Perils Insurance(FAPI) on the subject property for an amount equivalent to the appraised valueof the housing component of the residential unit or the loan amount,whichever is lower.

In case of staggered release of loan proceeds, the principal borrowershall likewise obtain interim FAPI coverage on the subject property fromthe date of issuance of the NOA / LOG by Pag-IBIG Fund.

10. PREPAYMENT

10.1 A borrower shall be allowed to prepay his housing loan in full or in partwithout prepayment penalty, pursuant to Republic Act 7394, otherwiseknown as "The Consumer Act of the Philippines", but subject howeverto a service fee as may be fixed by the Fund.

10.2 Accelerated payments - Any amount in excess of the monthly amortizationdue shall be treated as advance amortization and shall be applied on thenext amortization due date. However, upon request of the borrower andprovided the amount to be applied is equivalent to at least one monthlyamortization, said amount shall be applied to the principal.

The preference of borrower on the treatment of his excess payment must benoted on/properly disclosed in the Pag-IBIG Fund Receipt.

11. DEFAULT

11.1 The borrower shall be considered in default when he, or any of hisco-borrowers in case of a tacked loan:

11.1.1 Fails to pay three (3) monthly amortizations;

11.1.2 Failure of the borrower to submit proof of payment of the real estatetaxes for the year; or

11.1.3 Violates or fails to perform any of the obligations in thecontracts entered into with Pag-IBIG Fund.

In case of multiple housing loans, any event of default on any of thehousing accounts shall constitute default on all of his other housingaccounts.

11.2 At point of default, the outstanding obligation, which includes theprincipal, accrued interests, penalties, fees and other charges shall becomeimmediately due and demandable. The said amount shall likewise be subjectto the following:

11.2.1 The unpaid amount shall continue to be charged with a penaltyequivalent to 1/20 of 1% of the amount due for every day of delay.

11.2.2 It shall continue to bear interest at the stipulated rate from the timethe obligation becomes due and demandable.

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11.3 While the account remainsto be due and demandable,the borrower shallnot be granted another housing account under any of the Pag-IBIGhousingprograms.

11.4 In case of default, Pag-IBIGFundshall cancel the CTS/DCSor foreclosethe mortgage in accordance with the existing guidelines on the matter.

11.5 Payments for accounts in default and foreclosed accounts shall notrevive the housing loan account unless payment is sufficient to fullyupdate said account.

11.6 Any amount paid by the borrower to the seller/developer prior to loantakeout shall be recoverable from the seller/developer.

12. PROCESSINGANDAPPRAISAL FEES

For every availment of housing loan, the borrower shall pay the correspondingprocessing and appraisal fees for his application.

13. AVAILMENT OFSUBSEQUENTHOUSINGLOANS

13.1. A borrower, who has an existing Pag-IBIGhousing loan, may avail of asubsequent housing loan secured by the same collateral, inclusive ofthe value of the improvements on the property, if any, that covered hisexisting loan, or a different collateral property, subject to the followingconditions:

13.1.1. He is an active member of Pag-IBIGFund;

13.1.2. His housing account/s is/are updated; and

13.1.3. He has capacity to pay his obligation/s.

The aggregate value, representing the outstanding balances of hisexisting housing accounts upon application and the new housing loan,does not exceed P6,OOO,OOO.In case he is also a co-borrower, hisproportionate share in the outstanding balance of the existing housingloan under a tacked account shall be included in the computation of thesaid aggregate value.

13.2. The subsequent housing loan may be availed for any of the purposesprovided in this Guidelines.

A member may apply for a housing loan for the purchase of a parkingslot; provided, it is included in his application for the purchase of aresidential unit or he has an existing mortgaged residential unit withPag-IBIGFund.The parking slot and the residential unit must be locatedin the same real estate development project, or within walking distancefrom the said real estate development project.

13.3. The existing housing loan and the subsequent housing loan shall beconsidered as separate and distinct from each other, without prejudiceto the provision on cross-default.

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14. ALIGNMENT OF Pag-IBIG FUND SPECIAL HOUSING FINANCE PROGRAMSWITH THIS GUIDELINES

Unless otherwise specified in the memorandum of agreement or implementingguidelines of the Pag-IBIG Fund special housing loan programs, all terms andconditions provided in this Guidelines shall be adopted.

15. REVIEW OF THE GUIDELINES

The Guidelines on the Pag-IBIG Fund EUF Program shall be subject to reviewat anytime but not more often than once every two (2) years taking intoconsideration the viability of the Fund and the prevailing market conditions.

16. MECHANISM ON RESOLUTION OF ISSUES

Any issue in the interpretation and implementation of this Guidelines shall, as muchas possible, be resolved by the concerned officer. Matters that are not therebysatisfactorily resolved shall be escalated to the next higher approving authorities.

17. REPEALING CLAUSE

The Pag-IBIG Fund Circular Nos. 310, 349, 353 and 361, memoranda, rules,regulations and other issuances inconsistent herewith are hereby repealed.

18. EFFECTIVITY

This Circular takes effect after fifteen (15) days following the completion of itspublication in the Official Gazette or in a newspaper of general circulation.

w\.ACMAD RIZ DY P. MOTI

Chief Exe utive Officer

Makati City,January 9,2018