What is the role of the Home Guaranty Corporation in the government's shelter program? How does it differ from the roles of the Home Development Mutual Fund (HDMF), the "Pag-Ibig Fund" and the National Home Mortgage Finance Corporation (NHMFC)?
HGC supports homeownership among Filipinos by encouraging banks and financial institutions to lend to home/housing developers. It assures lenders and investors in housing by issuing loan and securitization guarantees. The HMDF/Pag-ibig Fund and NHMFC, however, directly lend money to housing developers and individual/group borrrowers.
What are the benefits of the HGC Guaranty?
1. It guarantees the payment of the guaranteed loan or investment balance outstanding and due on the principal obligation, plus interest yields of up to 11%;
2. It exempts the interests derived and other yields from the loan from all forms of taxes(up to 11% rate of interests);
3. For socialized housing, those with contract prices of P 300,000.00 and below are entitled to lower premium fees and to the maximum cover and tax-exempt interest of up to 11%, and;
4. The Government of the Republic of the Philippines guarantees the payment of HGC's obligations.
What are the guaranty programs of the HGC?
1. Developmental Loan Guaranty, which covers loans extended to developers for the development of subdivisions, townhouses, dormitories, apartments and other residential dwellings.
2. Retail Loan Guaranty, which covers loans and credit facilities extended for the purchase / acquisition of a single family residence.
3. Guaranty for Securitization Schemes, which provides guaranty cover on securities and/or financial instruments or on the receivables backing-up the securities.
Who may avail of HGC guaranty?
Banks, government and private financial institutions, housing developers, and Building and Loan Associations (BLAs) may avail themselves of the HGC Guaranty. These institutions must apply for a Guaranty Line from HGC. Upon approval, they may enroll their accounts against their approved Guaranty Line.
Why was the HGC Charter amended?
The corporate life of the HGC expired in 2000. To ensure that its mission of promoting home ownership by providing a viable system of guaranty for the housing sector shall continue, the HGC Charter was amended, which among others, has extended HGC's corporate life for another fifty (50) years.
What are the salient points of Republic Act 8763 or the HGC Act of 2000?
1. It gave the HGC another fifty (50) year corporate life;
2. The name of the Corporation was changed from Home Insurance and Guaranty Corporation (HIGC) to Home Guaranty Corporation (HGC);
3. The authorized capital stock was increased from PhP 2.5 billion to PhP 50 billion;
4. Included the Secretary of Finance and the Director General of the National Economic and Development Authority (NEDA) as Chairman and ex-officio member of the HGC Board of Directors, respectively;
5. Transferred the supervision and regulation of Homeowners' Associations to the Housing and Land Use Regulatory Board (HLURB);
6. Mandates HGC to promote the secondary mortgage market, and;
7. Prioritizes socialized and low-cost housing projects.
What is a Building and Loan Association (BLA)? What is the role of HGC on BLAs?
BLA encourages and promotes affordable means of capital formation for housing. The HGC is mandated to issue contracts of guaranty for the accounts of the BLAs.
Why does HGC have acquired Assets/Properties?
In the event that the borrowers defaulted in their amortization payments, the bank calls on the guaranty of the HGC. Upon payment by the HGC of its guaranty obligation, the banks subsequently assigns all their rights over the assets / mortgages of the said defaulted loan to the HGC.
How does HGC recover from/dispose of its acquired Assets/Properties?
If the original borrower cannot pay the arrears, HGC will accept purchase proposals from interested buyers, and in compliance with all governing laws regarding the sale of acquired and foreclosed properties of government agencies.
The property/ies shall be sold on an “AS IS, WHERE IS” basis.
Negotiated offers may be made in cash or on terms, on special cases.
1. Cash Purchase/s
Payment Period = Discount Rate
Spot Cash = 15%
30 days = 10%
60 days = 6%
90 days = 3%
2. Installment Term
Required Minimum Downpayment: 10% of selling price
Maximum Term: 15 years
For Hard to Sell Assets
1. Up to PhP 225,000.00 = 6% per annum
2. PhP 225,001.00 to PhP 2.0 Million = 9% per annum
3. More than PhP 2.0 Million = 12% per annum
For Regular Assets
1. Up to PhP 225,000.00 = 9% per annum
2. PhP 225,001.00 to PhP 2.0 Million = 12% per annum
3. More than PhP 2.0 Million = 14% per annum
3. Rent-To-Own Program
The lease shall be for a non-renewable period of five (5) years. However, the lessee can pre-terminate the lease at anytime before the end of the 5 th year of the contract, and exercise the option to purchase the property in cash or thru a housing loan from any financial institution.
* The initial cash out - two (2) months advance payment of rental and 1 month deposit is paid directly to the HGC.
* All payments made (net of penalties and VAT) by the lessee during the term of the lease shall be applied as downpayment for the purchase of property as follows:
Year = Percentage of Application
1 = 100%
2 = 90%
3 = 80%
4 = 70%
5 = 60
SOURCE URL: http://www.hgc.gov.ph/faqs.html