The Social Housing Finance Corporation (SHFC), the lead government agency mandated to undertake socialized housing for low-income earners, is celebrating its 16th anniversary by launching new schemes that will help more poor families realize their dreams of owning a home.
The Community Mortgage Program (CMP), SHFC’s flagship program, has benefited more than 350,000 families through over P16 billion in loan assistance since its inception in 1988. In 2019 alone, the agency recorded the highest takeout ever by assisting a total of 32,797 partner-homeowners through housing loans amounting to P2.48 billion. This number of partner-homeowners is twice that of the previous year and nearly thrice that of 2017.
Meanwhile, SHFC’s collections reached P1.11 billion in 2019, up 8 percent from the year prior. The agency’s current collection efficiency rating of 72.03 percent is significantly higher than the 69.05 percent it posted in 2018. These achievements can be attributed to the decentralized approach of SHFC, which saw the opening of several branches nationwide, and to its strategy of working closely with local governments.
This year, SHFC expects to assist more low-income families own their homes because starting January, the agency is adopting reduced or socialized interest rates for full package availment of loans under the CMP. A full package consists of a loan for lot acquisition, site development, and house construction. The socialized rates will ease the constraints that low-income CMP borrowers face when paying their monthly amortization.
Under the socialized approach, borrowers with lower household income will pay lower interest rates. Thus, households within the lowest two income deciles - including those with incomes below the poverty threshold based on the results of the latest Family Income and Expenditure Survey - will pay an interest rate of only 2 percent. This new rate is a huge reduction from the original 6 percent. It is also the lowest ever in the history of housing finance in the country. In addition, the repayment term is extended to 35 years from the original 25 years in order to further ease the burden on the lowest-income borrowers, who comprise the majority of CMP availers.
Families in the 3rd decile pay an interest rate of 4 percent, while those in the 4th to 7th decile pay 4.5 percent. Families in the 8th to 10th decile, or those who have the highest capacity to pay, will continue to be charged at the original rate of 6 percent. They will all have a repayment term of 30 years.
For those who have already availed of loans but are falling behind on their payments, SHFC also seeks to alleviate their burden and get them on track to their dreams by offering the penalty condonation program under Republic Act 9507. The loan restructuring scheme covers partner-homeowners with accumulated arrearages equivalent to at least three months amortizations, except those who have previously availed of the benefits.
This loan relief initiative will give economically depressed partner-homeowners an opportunity to easily update their accounts because they will no longer have to pay the accumulated penalties and surcharges incurred from unpaid amortization. As a result, they will be able to save their homes.
“This is our gift to our low-income clients on the occasion of our anniversary,” said SHFC President Atty. Arnolfo Ricardo Cabling, who urged CMP partner-homeowners to avail of this last chance to restructure their loans; otherwise, they will face a collection suit or foreclosure. “Thus, we are hoping that partner-homeowners will immediately file their applications before the program ends in 2021.”
To keep pace with the growing demand for safe, resilient, and sustainable housing, SHFC is introducing trailblazing financing programs with the launch of 12 CMP modalities. These include Housing for Peace Process & Nation Building, which is currently being implemented in Zamboanga City and Marawi City, and Post-Disaster Recovery and Rehabilitation, which is offered for families affected by disasters such as those rendered homeless by Typhoons Yolanda and Sendong.
Other CMP modalities are On-Site and Site Upgrading/Development, Special/National Government Agency Projects, Local Government Unit, Sectoral, Farm Lot, Industrial Workers, Culturally Sensitive/Indigenous People, Vertical, Mixed-Use/Township, and Turnkey/Public and Private Partnership.
The public can expect efficient implementation of SHFC’s programs because it has been recertified as conforming to ISO 9001:2015 standards by SOCOTEC Certification International. The certification was issued on December 19, 2019, affirming yet again SHFC’s conformity to international quality standards in its core processes and its Quality Management System. SHFC has been ISO-certified since 2016.