West Timawa People’s Organization

Proposed Loan Terms and Conditions

I. Total Loan Amount Granted: _______________________

II. Proposed Loan Amount: P 6,776,000.00 (Six Million Seven Hundred Seventy
Six Thousand Pesos Only)
III. Type of Loan: Land Acquisition Loan
IV. Parties to the Loan Contract: Loan contract shall be made and signed between
the Philippine Action for Community-led Shelter Initiative, Inc. (PACSII) as
LENDER, the West Timawa People’s Organization (WTPO) as BORROWER and
the HPFPI National President. The signatories to the loan contract must be duly
authorized by their corresponding organizations’ board members as evidenced by
a Board Resolution and Secretary Certificate.
V. Interest Rate: The interest rate applicable to Land Acquisition Loan is 8% per
annum based on the straight computation method;
VI. Schedule of Payment: Monthly (not later than the 5th day of the succeeding
month)
VII. Term of Payment: The total loan amount is payable within a minimum period of 5
years and a maximum period of 7 years;
VIII. Mortgage Redemption Insurance (MRI): All loan amount shall be covered under
HPFPI’s Mortgage Redemption Insurance (MRI) Policy with Country Bankers Life
Insurance Corporation (Country Bankers). HPFPI Regional Office shall request
Country Bankers to conduct an orientation on MRI which shall be attended by all
qualified loan borrowers. Upon first payment of the monthly amortization, individual
loan borrowers are required to fill-up and submit MRI application to HPFPI
Regional Office. Thereafter, HPFPI Regional Office shall send the consolidated
MRI application to Country Bankers under the HPFPI main MRI Policy. Upon
approval of application, individual certificate of coverage (COC) issued by Country
Bankers, shall be distributed to loan borrowers by HPFPI Regional Office. The
original copy shall be given to the loan borrower while the duplicate copy shall be
retained by the Regional Office. All MRI claims shall be made and processed by
the HPFPI Regional Office upon submission by the deceased loan borrower’s
declared beneficiaries of all the documentary requirements prescribed by Country
Bankers Life Insurance Corporation.
IX. Urban Poor Development Fund (UPDF): Loan borrowers are mandatorily
required to have a non-withdrawable Urban Poor Development Fund (UPDF)
Savings worth 100 pesos per month. This fund shall be retained in the local HPFPI
bank account and can only be utilized as a common association fund for additional
 community identified upgrading project or any other project identified by the
community which will benefit them collectively upon full payment of their loan
obligation. Upon full payment of all the loan obligation, the community association
shall make a formal request to access the savings supported by a project proposal.
The proposal shall then be submitted to the HPFPI Regional Office for review and
approval by the Regional Council
X. Disbursement of Loan Amount Granted: Upon approval of the loan, the total
loan amount granted shall be released by HPFPI National Office to HPFPI regional
office. Thereafter, the HPFPI regional office shall disburse the total loan amount to
the WTPO.
XI. Repayment Default:
a) Penalty: 5% of the monthly amortization due of the Ca /HOa (computed based on
the total principal and interest due for the month) shall be charged as a penalty in
case of repayment default and shall be retained by HPFPI Regional Office for local
repayment collection related activities. The penalty should be automatically
deducted from the monthly repayment of the succeeding month. Thus, despite full
payment for the succeeding month, the community association shall still incur
additional penalty if outstanding penalty are unpaid due to automatic deduction
from the monthly amortization. In order to avoid imposition of penalty therefore, the
association should pay the penalty on top of the monthly amortization due of the
succeeding month. The imposition of a higher penalty rate is intended to create an
impression of burden in the minds of the loan borrowers in case of loan default and
thus is expected to create a better repayment rate.
b) Issuance by the CA/HOA of a Post-dated Check: CA/HOA borrower is obliged
to issue post-dated checks indicating the monthly amount due and corresponds on
the monthly due dates (not later than the 5th day of the succeeding month) upon
disbursement of the loan amount. The post-dated check issued by the borrower is
intended to enforce payment of the association due for the month. If the
association failed to deposit the monthly monetary obligation through the post-
dated check, the Regional Office shall deposit the bounced check resulting to
criminal liability on the part of the WTPO.
c) Failure of CA to Pay Loan Obligation within agreed Loan Period/Term: Upon
termination of the loan term, all outstanding balance shall be due and demandable.
XII. Bank Deposit of Repayment Collection: All repayment collection shall be
deposited on a monthly basis (every 5th day of the succeeding month) by the
WTPO to the HPFPI regional/local bank account for recording, reconciliation and
monitoring purposes;
XIII. Remittance to Philippine Action for Community-led Shelter Initiative, Inc.
(PACSII): Total repayment collection shall be remitted to Philippine Action for
Community-led Shelter Initiative, Inc. (PACSII) annually. Upon receipt of the
remitted repayment collection, HPFPI shall demand acknowledgment receipt and
official receipt from Philippine Action for Community-led Shelter Initiative, Inc.
(PACSII).
XIV. Documentary Requirements:
 Copy of the Contract to Sell between WTPO and the landowner
 Zoning ordinance classifying the area as Residential
 Certified True Copy of the Land Title
 Subdivision Plan/Structural Survey
 Updated Tax Declaration of Real Property
 BIR’s Zonal Valuation of the subject property
 Assessed Value of the Property
 Certificate of Registration of the WTPO
 Board Resolution authorizing the WTPO President to execute and sign loan
contract with PACSII and HPFPI
 List of individual borrowers with corresponding lot area and record of
payments for the Equity
 Consolidated affordability assessment report
 Post-dated checks