Borrowing From Pag-IBIG to Buy or Build a Home

Who Can Borrow

Pag-IBIG's home loan rules (its End-User Home Financing program), as a Philippine embassy's Pag-IBIG page explains them, say a borrower must:

• be a Pag-IBIG member with at least 24 monthly contributions at the time of application;
• be not more than 65 years old when applying, and able to get insurance (insurable);
• be legally able to buy land and put it up as security for a loan (mortgage it);
• pass the Fund's background, credit and employment or business checks;
• have no unpaid (outstanding) Pag-IBIG housing loan, as borrower or co-borrower; and
• have no earlier Pag-IBIG housing loan that was foreclosed (taken back for non-payment), cancelled, bought back because payments stopped, or settled by giving up the property (dacion en pago).

An unpaid multi-purpose loan is allowed if your payments are up to date. Employees covered by SSS or GSIS are generally required to be Pag-IBIG members under Republic Act No. 9679 (RA 9679). Self-employed people, OFWs and others can join voluntarily.

What You Can Use the Loan For

• Buying a residential lot (up to 1,000 square meters).
• Buying a house and lot, townhouse or condominium unit, new or old, including a parking slot.
• Building or finishing a house on a lot you own.
• Home improvement that permanently improves an existing house.
• Refinancing an existing housing loan with another acceptable lender, if it has not been in default (behind on payments) in the last 12 months and has at least two years of payment history.
• Some combinations, such as buying a lot and building on it.

The Fund also sells homes it took back from borrowers who did not pay (foreclosed properties, or acquired assets) to members, for cash or through a housing loan.

How much you can borrow depends on your income, your contributions, the value of the property and your age. Pag-IBIG sets the interest rate by the repricing period you choose (how long the rate stays fixed before it is reset). Check the current rates on pagibigfund.gov.ph or ask a branch; we do not list them here because they change.

Where and How to Apply

1. Check your membership record and contributions (through Virtual Pag-IBIG or a branch).
2. Choose the property. If you buy from a developer, the developer often prepares and files the loan papers for you. If you buy from a private seller, you usually apply at a Pag-IBIG branch.
3. Hand in the application and documents. The Fund checks the property's value and whether you can afford the payments.
4. If approved, you sign the loan and mortgage documents, the mortgage is written on the land title (annotated), and the Fund releases the loan to the seller or developer.

Pay the Fund only through its official channels. Pag-IBIG does not need a fixer to process your loan.

Documents You Will Usually Need

Pag-IBIG publishes a checklist for each loan purpose. Expect to hand in:

• the housing loan application form, signed, with your photo;
• valid IDs of the borrower (and spouse, if married);
• proof of income: a Certificate of Employment and compensation, payslips or income tax return; or business and financial records if self-employed; or, for OFWs, an Employment Contract;
• property papers: a Certified True Copy of the land title (TCT for land, CCT for a condo), the latest Tax Declaration and real property tax receipts, and the lot plan and vicinity map;
• the Contract to Sell, Deed of Sale or Reservation Agreement with the seller or developer; and
• for building or improvement: building plans, a bill of materials and the Building Permit.

If someone signs for you, for example while you work abroad, they need a Special Power of Attorney. See Special Power of Attorney.

The Risks of a "Pasalo"

In a pasalo, a borrower who can no longer pay "sells" their rights to someone who takes over the monthly payments, often with only a private agreement or a notarized waiver. Before you agree to one, know what can go wrong:

• Pag-IBIG's records still show the original borrower. The title stays in the seller's name (or the developer's), with the Fund's mortgage on it.
• If the original borrower dies, leaves, sells to someone else or stops cooperating, you may have trouble getting the title transferred to you.
• If payments fall behind, the Fund can take the property back (foreclose), whoever has been paying.
• Money you paid to the seller may be hard to recover.

Ask Pag-IBIG directly about a formal assumption of the loan (officially taking it over in your name) or a transfer it approves, and do not pay until you know whether it will approve you. Check the title at the Registry of Deeds first. A Waiver of Rights between buyer and seller is not binding on Pag-IBIG. For a large purchase, have a lawyer review the documents.