Offier of the for tra TWENTIETH CONGRESS OF THE ) REPUBLIC OF THE PHILIPPINES First Regular Session 26 FEB 18 A10:52 SENATE 1863 RECEIVED BY: S. No. - Introduced by Senator Bam Aquino AN ACT INSTITUTING A LOAN RESTRUCTURING AND CONDONATION PROGRAM FOR SOCIALIZED AND LOW-COST HOUSING EXPLANATORY NOTE Thousands of beneficiaries of socialized and low-cost housing programs are now at risk of losing their homes due to accumulated unpaid amortizations, interest, penalties, and surcharges. Many of these borrowers are low-income workers whose earnings were disrupted by economic shocks, disasters, and rising living costs. For families already living at the margins, even temporary setbacks can cause loan balances to balloon beyond what they can realistically repay. If left unaddressed, delinquency can lead to foreclosure, displacement, and the waste of years of public investment in housing. This measure institutes a time-bound Loan Restructuring and Condonation Program for socialized and low-cost housing accounts under the National Housing Authority (NHA), Social Housing Finance Corporation (SHFC), National Home Mortgage Finance Corporation (NHMFC), and Philippine Guarantee Corporation (PGC). It allows eligible borrowers to restructure their loans without processing fees or downpayment, condones accumulated interest and penalties upon approval, and provides a more affordable interest rate and repayment schedule. The bill also establishes safeguards to protect institutional sustainability, excludes abandoned or foreclosed accounts, and incentivizes prompt payment. It does not offer blanket amnesty, but rather a targeted, structured, and rational intervention that recognizes both the financial realities faced by low-income borrowers and the need to preserve the integrity of public housing funds. By giving struggling families a realistic path to recover their housing loans, this measure strengthens communities, prevents unnecessary displacement, and safeguards prior government investments in socialized housing. It forms part of a broader housing reform agenda to build more homes, protect families from
displacement, and ensure that beneficiaries of government housing programs are not left behind by inflexible financing terms. In view of the foregoing, the passage of this measure is earnestly sought. Bam Aquin
Office of the E. TWENTIETH CONGRESS OF THE ) REPUBLIC OF THE PHILIPPINES ) First Regular Session 26 FEB 18 A10 :52 SENATE RECEIVED BY S. No. 1863 Introduced by Senator Bam Aquino 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
2 Condonation Act".
Sec. 2. Declaration of Policy. - It is the policy of the State to undertake a
4 continuing program of urban land reform and housing that will make available at 5 affordable cost decent housing and basic services to underprivileged and homeless 6 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 9 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 15 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;
(f) 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 property subject of a contract-to-sell that has been validly cancelled and has been re-awarded, allocated, or transferred to another qualified beneficiary; and (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.
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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, 5 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 9 the effectivity of this Act the rules and regulations to implement the provisions of this 10 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,