CONGRESS OF THE PHILIPPINES TWENTIETH CONGRESS First Regular Session HOUSE OF REPRESENTATIVES H. No. 6276 BY REPRESENTATIVES ROMULO, ROBES, GUINTU, CO-PILAR, DE LIMA, GATCHALIAN, PADIERNOS, TERENG, OAMINAL. (H.), ORETA, LABADLABAD, GALANG, FERRER (A.), SAN FERNANDO, MERCADO-REVILLA, RIDON, ODUCADO, GONZALES (R.), LAGON (S.), SOLON, LOYOLA, RIVERA, SINGSON-MEEHAN, CHUA-TAI, CALIXTO, ANGELES AND DEFENSOR AN ACT INSTITUTING A LOAN RESTRUCTURING AND CONDONATION PROGRAM FOR SOCIALIZED AND LOW-COST HOUSING Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:
SECTION 1. Short Title. - This Act shall be known as the "Housing Loan Condonation Act".
SEC. 2. Declaration of Policy. - It is the policy of the State to undertake a continuing program
of urban land reform and housing that will make available at affordable cost decent housing and basic services to underprivileged and homeless citizens. To this end, a rational loan restructuring and condonation program shall be instituted that takes into consideration the credit worthiness and credit discipline of the borrowers, and the financial viability of the lending institutions.
SEC. 3. Coverage of the Restructuring Program for Delinquent Socialized and Low-Cost
Housing Loan Accounts. - There is hereby established a Socialized and Low-Cost Housing Loan Restructuring and Condonation Program under the National Housing Authority (NHA), the Social Housing Finance Corporation (SHFC), the National Home Mortgage Finance Corporation (NHMFC) and the Philippine Guarantee Corporation (PGC). Under this program: (a) For a period of twenty-four (24) months after the issuance of the implementing rules and regulations of this Act, all socialized and low-cost housing loans with the NHA, SHFC, NHMFC, and PGC that have at least three (3) months of unpaid monthly amortizations as of the effectivity of this Act are hereby declared covered by the benefits of this Act, notwithstanding that the same accounts have availed of the benefits of a previous restructuring or condonation program: Provided, That the original principal amount of the housing loans shall not exceed One million eight hundred thousand pesos (P1,800,000.00);
(b) An application for restructuring shall not be charged a processing fee and no downpayment shall be required for a borrower to apply for the benefits of this loan restructuring and condonation program; (c) All existing interests on principal, penalties, and surcharges shall be condoned upon approval of the restructuring application under this Act: Provided, That an interest rate of three percent (3%) or the interest rate of the original loan, whichever is lower, shall be imposed upon the restructured loan; (d) The term of a housing loan account being applied for restructuring may be extended for a period longer than its original term in order to lower the amount of the monthly amortization: Provided, That in no instance shall the term of extension of the restructured loan exceed the difference between the borrower's age at the time of application and the age of seventy (70); (e) In case of permanent physical incapacity of a borrower, the legal heirs and successors in interest may assume payment of outstanding balance of the housing loan: Provided, That such legal heirs and successors in interest shall pass the NHA, SHFC, NHMFC, and PGC's eligibility requirement before they are allowed to assume payment of the borrower's loan obligation: Provided, further, That in case of death of the borrower, the proceeds of the Mortgage Redemption Insurance shall have been fully applied; (1) The loan restructuring under this Act may be availed of only once except in case of force majeure affecting the ability to fulfill the financial obligation of the borrower; and (g) The loan restructuring and condonation program provided for in this Act shall be construed as a separate and distinct program from the ones being implemented by the NHA, SHFC, NHMFC, and PGC and the borrower has the option to choose which loan restructuring and condonation program will be availed.
SEC. 4. Authority to Continue the Restructuring Program. - Notwithstanding the lapse of the
period provided in Section 3(a) of this Act, the governing boards of the NHA, SHFC, NHMFC, and PGC are hereby authorized to continue the loan restructuring and condonation program under this Act.
SEC. 5. Exclusion from Coverage. - In no instance shall the following housing loan accounts
be covered by this Act: (a) Any account without a single payment since takeout; (b) An account which housing unit has been abandoned by the borrower-owner for more than one (1) year from the date of delinquency; (c) An account which housing unit is occupied by a third party other than the original registered beneficiary or the legal heirs of the beneficiary up to the second degree of consanguinity; (d) An account that has been foreclosed and the redemption period has already lapsed;
(e) A properl, silice or tantrace 0- and the quas bet neidiary, ancelled and has been (f) A property that has been surrendered to the NHA, SHFC, NHMFC, or PGC through dacion en pago, the title of which has already been consolidated or transferred in the name of the NHA, SHFC, NHMFC, or PGC.
SEC. 6. Incentive for Prompt Payment of Monthly Amortization. - Upon the effectivity of this
Act, all accounts, the monthly amortizations of which are paid on time, shall be entitled to incentives, including a reasonable discount on loan interest, the amount or percentage of which shall be determined by the respective boards.
SEC. 7. Implementing Rules and Regulations. - The Department of Human Settlements and
Urban Development, NHA, SHFC, NHMFC, and PGC shall, in consultation with the relevant stakeholders, promulgate within ninety (90) days from the effectivity of this Act the rules and regulations to implement the provisions of this Act.
SEC. 8. Separability Clause. - If any portion or provision of this Act is declared
unconstitutional, the remaining parts or provision not affected thereby shall remain in force and effect.
SEC. 9. Repealing Clause. - All laws, decrees, orders, issuances, rules and regulations, or any
part thereof inconsistent with the provisions of this Act are hereby repealed, amended, or modified accordingly.
SEC. 10. Effectivity. - This Act shall take effect fifteen (15) days after its publication in the
Official Gazette or in a newspaper of general circulation. Approved,