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Do you remember when you got your first paycheck and thought about things you wanted to work hard for?
Did you have a conversation with yourself promising one day, when you have enough money, you will buy a place of your own?
With a Pag IBIG Housing Loan, many Filipinos can now own their dream house, townhouse, apartment, or condominium at a lower interest rate compared to traditional banks.
While there are different ways to get funding for a property like bank loans or private financing, there is a third option, the Pag-Ibig House Loan.
Knowing this, let’s explore how you can avail of a housing loan that will bring you closer to owning your place.
01 of 12What is Pag-IBIG Fund?
The Pag-Ibig Fund used to be called the Home Development Mutual Fund (HDMF), created to give service to a national savings program and to make it easier for Filipino workers to have affordable financing for shelter.
Before the HDMF, funds were handled by the Social Security System for private employees and Government Service Insurance System for government workers.
The private and government funds were merged under the Pag-Ibig fund and became an independent institution under a Board of Trustees. PD 1752 mandated Pag-Ibig membership for all SSS and GSIS employees.
- Lowest Interest Rate of 5.375% for regular loans and 3% for socialized housing loans
- 113 Pag-IBIG Nationwide branches
- 20 Pag-IBIG Overseas Posts to handle Overseas Workers Application
02 of 12What Purpose Can You Use for a Pag-IBIG Housing Loan?
It’s not easy to get a loan to help your financing, and oftentimes a tedious process. You have to complete a lot of requirements and get certification from different offices. But once you get approved for a Pag-IBIG housing loan, you can use the proceeds for a variety of purposes.
- Purchase a residential lot less than 1,000 sqm.
- Purchase an adjoining lot less than 1,000 sqm. with the cost of the transfer
- Purchase a house and lot, townhouse, condominium, or apartment with the cost of the transfer
- House Construction, Improvement, Renovation
- Refinancing an existing house loan or adding the Pag-IBIG loan to help finance the property.
What Are Pag-IBIG Housing Loan Eligibility Requirements?
Before you can get a Pag-IBIG housing loan, you must first become an active Pag-IBIG member and contribute to the Pag-IBIG fund for 24 months.
If you are a new member for 12 months, you can complete a lump-sum contribution to cover a 24 months total. Your age must be below 65 years old upon loan approval, and below 70 years old when the loan matures.
As this is a matter of loan application, you are expected to have a healthy credit history from other creditors and financial institutions. Your payments must be updated on any short-term or existing housing loan.
You will likely undergo credit investigation for past Pag-IBIG housing loans, any record of foreclosure, cancellations, or voluntary surrender of a property.
Read More: The Ultimate #1 Guide to Credit Score in the Philippines
03 of 12How To Avail of a Housing Loan from Pag-IBIG?
Availing of a housing loan from Pag-IBIG is not a difficult task. Below is an easy six-step guide to making it easier for you to apply for a loan.
1. Fulfill the Documentary Requirements to Qualify for a Pag-IBIG Loan
Like any government office, you must complete the required documents to be considered for a housing loan. Below is a list of applicable proof of income to help guide you in your application for a housing loan with Pag-IBIG. A word of reminder is you must answer the information with accuracy and correct statements.
- Proof of Income – Original latest 3 months Pay Slip with HR/Employer signature
- Latest 2 years bank statement with bank certificate for online and commission revenue
- Latest Business Permits – Mayor’s permit, DTI, COR, 3 Years ITR for self-employed
- Employee Statement of Accumulated Value, Notarized Original Certificate of Employment with Compensation, Employment Contract for local, OFW, Seaman
- Birth Certificate, Marriage Certificate if married
- 3 Photocopies of 2 Valid Government IDs with visible signature
- Verified Tax Identification Number
- 3 sets of Housing Loan Application Form with 3 ID photos of the borrower
- Vicinity Map of the Property
- Updated Tax Declaration and Tax Receipt
- Certified True Copy of the Title
2. Submit the Housing Loan Application
You submit your loan application and required documents to the Pag-IBIG branch nearest to you. Some companies can assist you with the processing and will charge a fee for their services.
3. Collect the Notice of Approval and Letter of Guaranty from Pag-IBIG
You have to collect the notice of approval (NOA) and the letter of guaranty (LOG) in the Servicing Department of the Pag-IBIG branch where you submitted your documents. It usually takes 17 working days from the date of receipt for Pag-IBIG to process your application.
4. Submit the NOA Requirements of Pag-IBIG
You need to submit the NOA requirements of Pag-IBIG within 90 days before they release the loan. Ensure that your documents are all in order:
- Transfer Certificate of Title (TCT) with the name of the borrower/co-borrower. IT can also be the true copy of the TCT.
- Updated tax declaration and tax receipt that states the name of the borrower/co-borrower.
- Loan Mortgage Documents (loan and mortgage agreement from Registry of Deeds, Deed of Absolute Sale from Registry of Deeds, disclosure statement on loan transaction, and promissory note that is notarized)
5. Claim the Loan Proceeds in the Pag-IBIG Branch
You can follow up on loan approval in the Service Department of the same Pag-IBIG branch where you submitted your documents. After 10 days, you can check if the loan amount is ready for release. You can also follow up on your loan status verification through the Virtual Pag-IBIG page to chat and get updates.
6. Start Paying the Pag-IBIG Loan Monthly Amortization
You have to prepare your first payment on or before 30 days from the check date of your loan. The payment date will fall on the same day every month, and it is up to you to pay earlier if it falls on a weekend.
A word of caution for delayed payments on your amortization, Pag-IBIG charges a penalty rate of 1% of the amount due per day of delay.
04 of 12How Much Can You Borrow for a Housing Loan in Pag-IBIG?
The maximum Pag-IBIG loanable amount is Php 6 million, but this is not always the approved actual amount for every borrower. You will likely get the lower amount between the exact amount of the property or the loan entitlement. This amount is based on your capacity to pay or the property’s loan-to-appraised value ratio.
Many financial advisors will say that to speed up the approval of a housing loan, you should have at least 20-30% of the property value for a down payment. This works for you in the long run as you borrow less with a lower interest rate and the loan-to-value ratio. You can manage your monthly mortgage or amortization on a shorter loan term.
05 of 12What Are The Interest Rates for a Housing Loan in Pag-IBIG?
An advantage for any borrower is to compare the interest rates of housing loans to ensure you get the best package. Pag-IBIG interest rates are much lower than the bank rates and private lending institutions.
An option you could do is avail of the Pag-IBIG loan, then supplement the balance with another loan, so you have a combination of both and still average the interest rate lower than a housing loan from the bank or a private lender.
06 of 12How To Compute Using a Pag-IBIG Loan Calculator
You can use the Pag-IBIG Loan Affordability Calculator to help you compute the loan you can avail of with Pag-IBIG.
For purposes of computation, we will use the value of the maximum loan of Php 6 million that Pag-IBIG Fund releases. We assume it is paid in twenty (20) years with a fixed ten (10) year interest rate.
A. How Much to Borrow based on the value of the property?
Scenario 1: The property you want to buy is about Php7.5 million, but the maximum loanable amount from Pag-IBIG is Php 6 million. You want to pay within 20 years, with a fixed pricing period of 10 years at 7.375%. Based on the Pag-IBIG Calculator, you should have a gross monthly income of Php 123,114.94 and pay Pag-IBIG a monthly amortization of Php 44,332.23.
|Pag-IBIG Calculator Based on Property Value||Other Indicative Figures|
|Estimated Value of Property – Php 6,000,000.00||Principal & Interest- Php 43, 090.23|
|Preferred Repayment Period – 20 years||Monthly Amortization- Php 44,332.23|
|Preferred Fixed Pricing Period – 10 years; 7.375%||Estimated Equity- Php 600,000.00|
|Approximate Loan Based on Appraised Value- Php 5,400,000.00||Gross Monthly Income- Php 123,114.94|
B. How Much Can You Borrow Based on Your Income?
Scenario 2: You can assess your gross monthly income of Php 100,000.00 from your job through the Pag-IBIG Affordability Calculator. If you plan to apply for a Pag-IBIG Loan with a preferred fixed price period of 10 years at 7.375% and payable in 20 years, you are eligible for a Pag-IBIG loan amount of Php 4,386,145.23. You pay a monthly amortization of Php 36,008.81.
|Pag-IBIG Calculator Based on Income||Other Indicative Figures|
|Gross Monthly Income- Php 100,000.00||Principal & Interest- Php 35,000.00|
|Preferred Repayment Period – 20 years||Monthly Amortization- Php 36,008.81|
|Preferred Fixed Pricing Period – 10 years; 7.375%|
|Approximate Loan Based on Gross Monthly Income Php 4,386,145.23|
C.How Much Income is Required For the Desired Loan Value
Scenario 3: You want to find out how much proof of income you need to get the maximum Pag-IBIG loan of Php 6 million. If you use the Pag-IBIG Calculator, you need to prove that your income is higher than Php 136,794.38. You will have to pay Pag-IBIG Php 49,258.03 every month out of your declared income.
|Pag-IBIG Calculator Based on Desired Loan Value||Other Indicative Figures|
|Estimated Value of Property – Php 6,000,000.00||Principal & Interest- Php 47, 878.03|
|Preferred Repayment Period – 20 years||Monthly Amortization- Php 49,258.03|
|Preferred Fixed Pricing Period – 10 years; 7.375%|
|Income Required for Desired Loan Amount- Php 136,794.38|
07 of 12What Are The Available Modes of Pag-IBIG Payment?
Paying your Pag-IBIG Housing Loan is easy and hassle-free. You can choose among the many options such as:
- Pag-IBIG Fund Branches Nationwide
- Bank – Asian United Bank, United Coconut Planters Bank, Metrobank, Land Bank of the Philippines
- Non-Bank – Bayad Center, SM, M. Lhuillier, ECPay
Digital Payments (Mobile/Internet)
- Banks – Asian United Bank and United Coconut Planters Bank
- Non-Bank- GCash, Moneygment by Campinas, Coins.ph by Bayad Center, Pay by Maya, ECPay, Lazada, Shoppee, SNDT Express
Online Payment Facilities
- Visa & Mastercard Debit/Credit, JCB, Pay by Maya
Employer’s On-Line Payment Facility
- Union Bank of the Philippines, Bank of the Philippine Islands, Land Bank of the Philippines, Security Bank Philippines, Bancnet
- Philippine National Bank, Asian United Bank, iRemit, Ventaja, Cashpinas
08 of 12Foreclosed and Auction Properties of Pag-IBIG For Sale
Pag-IBIG has a list of foreclosed and acquired properties that you can buy from. An acquired asset is considered foreclosed by Pag-IBIG for failure to pay monthly amortization.
In the event the auction or public bidding fails, it goes through a negotiated sale of a 30% discount. Pag-IBIG buys back the foreclosed property of a delinquent borrower, by giving two options:
- The property is offered to a tenant occupying or renting the foreclosed property.
- The foreclosed property goes through public bidding, where new buyers buy a property at a lower price.
Those who opt to buy are on a budget or low-income earners who want to buy a bargain house. After all, the prices of the acquired properties are below the market value with lower monthly amortization.
Other buyers are real-estate investors looking for a good deal or investment to flip and sell later on. They buy low and either sell or rent higher.
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09 of 12List of Pag-IBIG Foreclosed Properties for Sale
One way to get the listing is to coordinate with the Marketing and Sales-Acquired Assets Management Group in the Pag-IBIG office on Shaw Blvd., Mandaluyong for Manila property listings.
For provincial property listings, you have to go to the regional branches of Pag-IBIG.
Another way is to check the list of foreclosed properties by going to the website of Pag-IBIG Fund. Look for the Property Finder page, which will lead you to the Acquired Assets page.
For Manila listings, these are updated regularly, while the provinces are updated every Friday. Click the List of Negotiated Sale Highest Offers and download the PDF of NCR or other provinces.
10 of 12How To Check the Schedule of Public Auction of Pag-IBIG Acquired Assets
The Pag-IBIG Fund Acquired Assets page has the schedule of Public Auctions section. The property listings are divided into NCR or provinces and categorized as with discount and no discount. You will see the different locations and details for your guidance.
- Duration of Acceptance of Bid Offers
- Dropbox Location
- Opening Bid Offer
Take note of the details of the foreclosed property you want to buy and list down the following
- Property number
- Property location
- Type of property
- Transfer Certificate of Title (TCT)
- Lot area
- Floor area
- Minimum bid
- Appraisal date
11 of 12Tips on Buying Foreclosed Properties in Pag-IBIG
Buying a property means you have to check that the listing has no issues before moving forward to buy it. You consider the neighborhood of its location, you look at the physical elements of the property or land, and you have the documentation verified. The same process goes into buying a foreclosed property.
- Do an ocular inspection of the property and check for structural damage or needed repairs.
- You need to be physically present when you make a reservation for the acquired asset or a Special Power of Attorney if the buyer is an OFW.
- Avoid fixers and fake agents and only transact with Pag-IBIG employees
- Choose an acquired property that is vacant to avoid issues with occupied properties.
12 of 12Conclusion
Many of us work hard to save for a home we can call our own. We opt to rent or live with family members before taking the big plunge. But at some point, you will want to have your own house as the family grows with lasting memories together.
So when you take the next big step and decide that it’s time to build your house, you know there is an affordable way to do it.
Your dream to own your place can happen with the help of a Pag-IBIG loan. If you are financially ready to pay for the monthly amortization, then it’s time to process your requirements and get approved for a Pag-IBIG housing loan.
In a few weeks, you could be holding your Pag-IBIG Loan proceeds and closing a deal on the property you will call home sooner rather than later.
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