Socialized Housing Finance Corporation (SHFC)

In accordance with the pertinent provisions of Republic Act (RA) No. 7722, also known as “Higher Education Act
of 1994”, RA 10121 – Philippine Disaster Risk Reduction and Management Act of 2010, , pursuant to its commitment to
the utmost achievement of quality, relevant and efficient higher education in the country.

I. Contact Person
a. Mr. Florencio R. Carandang Jr.
Manager, Planning Department
Social Housing Finance Corporation
750-6346
II. OBJECTIVE
a. Empower and uplift the living conditions of underprivileged communities by:
i. Providing flexible, affordable, innovative, and responsive (FAIR) shelter solutions;
ii. Building strong partnerships with national and local government, as well as civil society
organizations and the private sector, for the attainment of affordable housing and;
iii. Supporting the underprivileged communities housing initiatives
III. LEGAL BASIS
a. Executive Order 2721
b. Republic Act 72792
c. Corporate Circular No. 13-026, Series of 20133
IV. BENEFITS
a. Localized Community Mortgage Program (LCMP)
A modified community mortgage program which extends financial assistance for the acquisition of the
land occupied by the constituents of the local government unit or the land where they will be relocated
through the concept of community ownership, with the land primarily mortgaged to SHFC

i. Eligible Requirements of Partners

1. Local Government Units (LGUs) (Cities, Municipalities)
a. Updated Local Housing backlog inventory
b. Updated Comprehensive Land Use Plan (CLUP) and updated Comprehensive
Shelter Plan (CSP) approved by the Local Housing Board (LHB)
c. Functioning LHB
i. Creation of LHB should be at the Local level with equitable multi
sectoral representation and must have a NGO/People’s Organization
(PO) representative involved in housing and urban development
d. Functioning unit in charge of social housing/housing programs
e. Budget allocation approved by Sanggunian
f. Has not exceeded allowable 20% credit carrying capacity
g. Approved Annual Investment Plan (AIP) with LCMP project/s
h. Updated list of present and previous beneficiaries of National and Local
Government Housing Programs
2. Community Association (CA)
a. Registered with Housing and Land Use Regulatory Board (HULRB)
b. Prioritized target as reflected in the CSP and AIP
c. Financially Stable; and
i. Show at least one (1) year historical statement of bank account
d. Open a savings account to be called the Community Fund

1
Mandated SHFC to develop and implement social housing programs that cater to low-income families
2
An Act to Provide for a Comprehensive and Continuing Urban Development and Housing Program, Establish the Mechanism for the
Implementation, and for Other Purposes
3
High Density Housing Project Guidelines
 i. Balance Equivalent to six (6) months amortization of the LCMP loan
3. Member-Beneficiaries (MB)
a. Bonafide resident of LGU and a member of CA
b. Has not yet availed any housing loan
c. Do not own or co-own any housing unit
d. Eligible under Community Mortgage Program (CMP) guidelined:
i. Legal Age (18-60 years old)
ii. Husband and wife (1 loan)
iii. No lot/ housing loan
iv. Earning

Provinces are encouraged to extend assistance to their respective cities and municipalities.

 A qualified Local Government Unit is accredited by SHFC as partner-LGU and as such

shall perform all pre take-out functions of SHFC such as;
1. Accreditation of CMP Mobilizers;
2. Background Investigation of projects;
3. Site Inspection and appraisal of projects;
4. Loan examination; and
5. Mortgage examination.

 The LGU is subsequently provided with an Omnibus Commitment Line (OCL) not to
exceed P50 Million, with one (1) year validity on projects identified by the partner-LGUs.
 As partners in this undertaking, the LCMP will serve as a vehicle what will enable the
LGUs to maximize their limited housing budget, with SHFC providing an additional
maximum funding equivalent to:

a. Seventy-five (75%) of the project cost for 1st to 4th class citiesl or
b. Ninety percent (90%) of the project cost for 5th and 6th class cities and all
municipalities.

 The remaining equity of the LGU can come in any of the following form:

a. land owned by the partner-LGU;

b. cash financing to pay-off the lot price; or
c. site development

ii. Details of the CMP Loan

1. On-site Projects – for the purpose of acquiring the land occupied by informal settlers of
the partner-LGUs
2. Off-site Projects – for the purpose of acquiring and developing the land where informal
settlers will be relocated through the concept of community ownership
Loan Amount: A beneficiary can avail of a maximum loan amounting to P100,000 for lot
acquisition; P30,000 for site development; and P120,000 house construction loan; for a maximum
total loan of P250,000.

Amount
Loan Purpose
Loan Amount Monthly Amortization
Lot Acquisition P100,000 P685.30
Site Development P30,000 P205.59
House Construction P120,000 P834.60
Total Package P250,000 P1,725.49
 Interest Rate: 6% per annum
Maximum Term: 25 years
Loan Repayment: one (1) month after the release of the loan proceeds
Remittance of monthly payment: Community Associations (CA) shall collect the share of its
members in the monthly amortization and remit the same to SHFC or to its accredited collecting
bank (Landbank of the Philippines)
Defaulting members: CA shall find a substitute member who shall assume the obligation of the
defaulting member
iii. Benefits from LCMP
The partner –LGU shall be entitled to 1/6 of actual amount of interest collected from the CA
monthly loan amortization as incentive for collection services rendered if the Collection Efficiency
Rating (CER) of the project reaches 90%-100% rating, provided further that they have assisted
SHFC in its collection campaign. The 1/6 interest incentive shall however be released only after the
issuance of post-audit clearances from SHFC.
iv. Security for the OCL/CA Loan
The partner-LGU shall put up a refundable cash deposit to SHFC equivalent to six (6) months
amortization of the CA loan as a performance warranty to cover the projects enrolled under the
OCL to be paid prior to issuance of LOG.

The CA, on the other hand, with the assistance of the partner-LGU, shall be responsible for the
payment of advance payment equivalent to three (3) months amortization of the CA loan and one
(1) year Mortgage Redemption Insurance (MRI) to be paid prior to loan release. This payment
maybe applied to the CA loan in case of default.
v. Requirements
1. Filled up Pro-forma Application Form;
2. An updated inventory of local housing backlog
3. Municpal/City Council Resolution for the creation of a Local Housing Board (LHB) with
equitable multi sectoral representation that must have a NGO/PO representative
involved in housing and urban development
4. Municipal/City Council approved organizational structure and personnel complement of
the unit/department in-charge of socialized housing or other housing programs;
5. Municipal/City Council Resolution authorizing the Local Chief Executive to make a
refundable cash deposit equivalent to six (6) months amortization of CA loan in favour
of SHFC as performance warranty for the projects’s to be enrolled under the OCL as well
as authorizing the said Local Chief Executive to sign, negotiate, and transact with SHFC
and other LCMP partners to fully operationalize and implement LCMP in the locality
6. Municipal/City Council resolution specifying the list of priority projects together with its
respective funding allocations
7. Project Profile of projects to be enrolled including:
a. Appraisal report
b. Masterlist of Beneficiaries
8. Municipal/City approved Ordinance indicating the procedure and criteria for
accreditation of CMP Mobilizers
9. Updated Comprehensive Land Use Plan (CLUP) and Comprehensive Shelter Plan (CSP)
approved by LHB
10. Municipal/City Council ratified Annual Investment Plan (AIP) indicating the prioritized
LCMP project/s for the year and the approved regular budget allocation for housing
11. Commission on Audit (COA) Audited Financial Statements for the past three (3) years
vi. Warranty issued by the partner-LGU
1. The CA is a bonafide association and its acts are the voluntary acts of the members for
the purpose of acquiring and keeping the property for themselves; and that the CA MBs
are the rightful occupants of the property and are aware of their obligations under the
CMP
 2. The MBs have not availed of any government housing program
3. The physical existence of the identified project/s has been established; the TCT is
authentic and is free from liens and encumbrances; and the registered owner, for
privately owned property, is still living, and
4. Any violation of any warranty shall be a ground for SHFC to impose any or all of the
penalties provided under Section 11 of the Amended Implementing Guidelines for LCMP
thereof
vii. Processing Time
1. For the release of loan proceeds shall not exceed thirty (30) calendar days from receipt
of the complete set of LCMP documents from the partner-LGU
b. High Density Housing Program
i. Definition : Refers to a slum redevelopment strategy wherein a significant number iof informal
settler families are accommodated in multi-storey buildings. This may implement by either an
in-city or near site relocation or a land sharing arrangement.
ii. Loan Purpose
1. Loan and building construction
a. Loans for land may involve land acquisition and/or site development. However,
site development may be financed only if the loan entitlement can cover the
loan or through a two-phased line availment
2. Building construction
a. The CA may avail of loan for a building construction only if the land has either
been donated, lease to, or subject to a usufruct arrangement with the CA. The
lease contract or usufruct arrangement shall be for a period of at least 30 years.

iii. Loan Entitlement

1. Maximum amount of a loan a community member can avail is P450,000. The amount
may be increased based on the loan ceiling for social housing as approved by the
Housing and Urban Development Coordinating Council (HUDCC).
2. Interest rate is 4.5% per annum for a maximum periods of 30 years
3. Loan Ceiling per ISF:
a. P300,000 (Single-storey)
b. P350,000 (Two-storey)
c. P375,000 (Three- storey)
d. P400,000 (Four-storey)
e. P450,000 (Five-storey)
iv. Repayment Scheme
1. Modes of Amortization
a. 30 years – graduated amortization in the first 10 years (10% annual increase);
fixed amortization for the 11th year onwards
b. A grace period of one (1) month to pay the initial amount of amortization,
reckoned from the time of occupancy of the building shall be granted to the CA.
c. The rent-to-own scheme shall last up to five (5) years only, after which it shall
be the legal obligation of the availee/s either to enter into a contract to sell with
SHFC or voluntarily vacate the premises without the need of any demand to do
so.
v. SHFC partners implementing HDH Project
1. National Government Agencies and Local Government Units
2. Community Associations
3. Civil Society Organizations
4. Private Sector
vi. Eligibility of Beneficiaries
1. Community associations of informal settlers who are living in danger areas and along
the waterways in highly urbanized cities of the NCR.
 vii. Responsibilities of Community Association (CAs)
1. Identification of ISF beneficiaries of the project
2. Community profiling survey
3. Mobilization of community resources that will respond to project needs
4. Loan documentation
5. Project planning and project management
6. Estate management that will include collections of payments, maintenance of building
and enforcement of community rules and regulations
a. Payment of taxes and permits relative to project implementation and
management
b. Organizational maintenance
viii. Important Information
1. The CMP policy guidelines for land acquisition shall be adopted with the subdivision plan
and the building permits as additional requirements for building construction loans
2. Building standards shall be complied with
3. Contractor or developer shall be required to submit a performance Bond as a security
for the completion of the construction
4. A retention fee equivalent to 10% of the contract price shall be imposed and shall only
be released after a Certificate of Completion and Acceptance from the CA has been
received and validated by the SHFC. The validation process shall be within maximum
period of 15 calendar days after receipt of the Certificate of Completion and
Acceptance.
5. SHFC shall have the option to acquire/purchase the land and retain ownership of the
same while allowing qualified families to acquire and pay only for the cost of the
building
6. SHFC may also opt to co-own the land, including the building, and implement a public
rental scheme to be adopted in projects wherein a significant number of families may
not be able to afford the monthly amortization.
ix.
c.