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Corporate Headquarters
The Atrium of Makati,
Makati Ave., Makati City

HDMF Circular No. 267

TO : ALL CONCERNED

SUBJECT : GUIDELINES IMPLEMENTING THE PAG-IBIG INTEREST SUBSIDY

PROGRAM FOR SOCIALIZED HOUSING LOAN BORROWERS

Pursuant to the approval of the HDMF Board of Trustees in its 258th Board
Meeting held last 29 June 2009, the following Guidelines Implementing the Pag-IBIG
Interest Subsidy Program for Socialized Housing Loan Borrowers are hereby
issued:

A. OBJECTIVES

The Pag-IBIG Interest Subsidy Program aims:

1. To provide members of the Fund with ample opportunities to improve their quality
of life;

2. To make the Pag-IBIG end-user housing loan program more affordable for low-
income borrowers;

3. To promote home ownership by providing financial support to the program’s

intended beneficiaries.

B. COVERAGE

These guidelines shall be applicable to borrowers whose socialized housing loans

are taken out beginning 1 July 2009 to 30 June 2014.

C. ELIGIBILITY

To qualify for the Pag-IBIG Interest Subsidy Program, a member must satisfy the
following requirements:

1. An eligible borrower under the prevailing end-user housing loan program;

2. Has not acquired a house or availed of a housing loan from the Pag-IBIG Fund or
from any agency or financial institution;

3. Is availing of a Pag-IBIG Housing Loan amounting to at most Four Hundred

Thousand Pesos (P400,000.00) for the following loan purpose:

a. Purchase of residential lot not exceeding One Hundred and Sixty Thousand
Pesos (P160,000.00) in selling price;
b. Purchase of residential unit and lot, which may be old, brand new, mortgaged
with the Fund or an acquired asset;
c. Purchase of lot and construction of a residential unit thereon;
d. Construction or completion of residential unit on a lot owned by the borrower;
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 4. Has an annual gross family income not exceeding One Hundred and Eighty
Thousand Pesos (180,000.00).

D. INTEREST SUBSIDY

Beneficiaries shall be entitled to an interest subsidy of 1.5% per annum for the first
five (5) years of the loan term.

E. MECHANICS

1. Five hundred (500) beneficiaries monthly shall be chosen by raffle from among
qualified borrowers evaluated from the preceding month/s. Allocation of
beneficiaries for the NCR Housing Operations Sector and regional branches shall
be determined annually based on membership level.

2. Beneficiaries shall be notified by registered mail and phone call. Their names
shall likewise be posted at announcement boards in all HDMF branches and at
the Fund’s official website.

3. Non-winning borrowers shall still be eligible for succeeding monthly draws,

provided he/she is updated with his/her monthly amortization payments and has
not been in default at any time before his/her raffle number is drawn in the raffle.

4. In case an applicant is drawn after he/she has made several payments, his/her
loan payments shall be recomputed; the resulting excess payments shall be
reallocated and applied in accordance with his/her preference, either as advance
payments or to apply the said amount to the principal.

F. DEFAULT

The borrower shall be in default in any of the following cases:

1. Any willful misrepresentation made by the borrower in any of the documents

executed in relation hereto;

2. Failure of the borrower to pay three (3) consecutive monthly amortizations

and/or contributions;

3. Violation by the borrower of any of the policies, rules, regulations and

guidelines of the Fund.

G. EFFECT OF DEFAULT

In the event of default, all subsequent subsidies to be granted to the borrower shall
be forfeited. Hence, notwithstanding any payment of the borrower to update his
account, the amortization due for the month following the date of default and every
month thereafter shall be reverted to the regular monthly amortization rate.

H. IMPLEMENTATION

An aggregate loan value of Two Billion and Four Hundred Million Pesos
(P2,400,000,000.00) shall be allocated to finance the housing loans of six thousand

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 beneficiaries annually. This program shall be implemented for the next five (5) years
from effectivity of these guidelines.

I. SUNSET PROVISION

The program shall be implemented for five years from the date of effectivity of these
guidelines. Extension of the program shall be subject to a “sunset review”, taking
into consideration the viability of the Fund and prevailing market conditions.

J. EFFECTIVITY

These guidelines shall take effect immediately.

Makati City
July 24, 2009

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