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Pursuant to the approval of the Pag-IBIG Fund Board of Trustees in its 298^th Meeting held last 24 September 2013 as well as in its 300^th Meeting held last 30 January 2014, the Guidelines Implementing the Pag-IBIG Fund Takeout Mechanism for Developer-Assisted Housing Program are hereby issued:

I. OBJECTIVES

The program seeks to achieve the following objectives:

1. To encourage the participation of developers in providing the needed housing inventory that can be made available for sale to Pag-IBIG member-buyers via a Pag-IBIG housing loan.

2. To define parameters in the allocation and disbursement of funds allocated for housing, specifically for Developer-assisted housing loans.

II. COVERAGE

The coverage under these guidelines shall be optional for accredited Developers for six (6) months from date of effectivity. Within the said period, accredited Developers may still be evaluated and be subject to the terms of Circular Nos. 259, 287 and 298. After 6 months from effectivity, coverage herein shall be mandatory.

III. MECHANICS

1. Pag-IBIG Fund shall accredit Developers who shall participate in the program to ensure that its objectives are met.

2. The Fund and the accredited Developer shall enter into a Memorandum of Agreement (MOA) providing for among others:

2.1 That the Fund shall provide a funding allocation to the Developer upon compliance with the terms and conditions set by the Fund.

2.2 That the Developer shall receive, pre-process and deliver applications of Pag-IBIG member-buyers for the purchase of a lot/house and lot/condominium unit in the Developer’s subdivision/condominium project.

2.3 That the Fund shall approve the applications for the purchase of a lot/house and lot/condominium unit of Pag-IBIG member-buyers that meet the Fund’s criteria as provided in the prevailing Pag-IBIG Fund Housing Program.

2.4 That the Fund and the Developer shall execute a Deed of Absolute Sale (DOAS) for the residential unit chosen by the Pag-IBIG member-buyer. The Fund, in turn, shall execute a Deed of Conditional Sale (DCS) in favor of the Pag-IBIG member-buyer.

Upon the written request of the member-buyer, and provided the loan-tovalue ratio does not exceed fifty percent (50%), the HL account may be a REM account. The Developer shall execute a DOAS in favor of the member-buyer, who shall, execute a mortgage on the property in favor of the Fund.

2.5 That the Developer shall process and shoulder the cost of transfer of the certificate of title to the property from its name to the name of the Fund.

2.6 That the release of proceeds shall be made in accordance with the terms and conditions provided in these guidelines.

2.7 That the Developer shall buyback the accounts that are affected by breach of warranties.

2.8 The MOA between the Developer and the Fund shall be subject to crossdefault as defined in existing pro-forma loan documents prescribed by the Fund.

3. The Developer shall submit to the Fund the Pag-IBIG member-buyer’s application for the purchase of a lot/house and lot/condominium unit. The first submission of applications shall be scheduled and must be carried out not later than sixty (60) calendar days from the date of signing of the Memorandum of Agreement.

4. Applications delivered by accredited Developers shall be processed within fifteen (15) working days from submission of the documents listed in the Checklist of Requirements. A Notice of Approval (NOA) shall be issued if the Pag-IBIG member-buyer meets the Fund’s eligibility criteria in its prevailing housing program. The NOA shall be valid for ninety (90) days only, reckoned from date of receipt thereof. In case the requirements for the takeout of the account are not submitted within the prescribed period, the Pag-IBIG member may re-file his application subject to the payment anew of the filing fee.

If any negative findings on the application can be rectified, a Notice of Deficiency shall be issued and the developer shall be given ten (10) working days from receipt of the notice to make such corrections. If the affected application is re-submitted beyond the 10-day period given to the developer, said application shall be considered as a new application and the Pag-IBIG member-buyer shall be required to pay the re-filing fee.

In case the application is disapproved, the Fund shall issue a Notice of Disapproval, stating the grounds therefor.

5. A Developer may request for advance evaluation of borrowers or inspection of completed units; provided, a written request is submitted to the Fund and the corresponding filing fee is paid. The Credit Investigation Report (CIR), Buyer Validation Sheet (BVS) and the receipt of the filing fee must be submitted to the Fund when filing the Pag-IBIG member-buyer’s housing application. The CIR and BVS shall be valid for six (6) months only.

6. All developer-assisted accounts shall be supported by a DCS on the subject property. The Pag-IBIG Fund may allow an account to be secured by Real Estate Mortgage when the loan to collateral ratio does not exceed fifty percent (50%).

The Senior Management Committee shall set or adjust the limit on housing packages that will adopt the DCS documentation as it may deem necessary.

7. The Fund shall accredit Developers who will enter into a Collection Servicing Agreement (CSA) with the Fund and act as its collecting agent for one (1) year from execution of the CSA, provided said Developer meets or exceeds the criteria provided in Item XI Section 1 hereof.

IV. ACCREDITATION OF DEVELOPERS

1. The Fund shall accredit Developers who shall participate in the program annually, in accordance with the following criteria:

1.1 Any of the Developer’s key officers or shareholders must not be among those blacklisted by the Fund from participating in any of its loan programs, or any of the Developer’s key officers or shareholders must not be a key officer or shareholder of a Developer that has been blacklisted by the Fund. Key officers refer to Board of Directors, president/general manager/chief executive officer, corporate secretary, corporate treasurer and similar positions.

1.2 The Developer must be duly authorized to operate as evidenced by a Certificate of Registration from the Securities and Exchange Commission (SEC) or the Bureau of Domestic Trade (BDT);

1.3 The Developer must at least have a satisfactory financial performance/ position as evidenced by its latest audited financial statements (stamped received by the Bureau of Internal Revenue) with no adverse opinion/ disclaimer; and

1.4 The Developer must not be in the banks’ or financial institutions’ Negative List.

2. The Developer must satisfy or disclose related real estate entities. Related real estate entities refer to the parent company and subsidiaries of the Developer, and to business entities engaged in the real estate business, whether or not they are currently transacting with the Fund, either as developer, seller or marketing agent of another developer or individual, in which the Developer or any of its key officers is also a key officer or a shareholder.

If a Developer has related real estate development company/ies, the performance of one of the related entities shall determine if the application for accreditation and classification of the Developer under applicable guidelines will be approved or not, and vice versa.

The Pag-IBIG Fund Housing Business Center which has the jurisdiction over the principal place of business of the Developer shall evaluate the application for accreditation and determine the corresponding classification of said Developer. The Business Development Sector, however, shall evaluate said application and accordingly determine its classification when the said Developer has a project in the National Capital Region regardless of its principal place of business.

V. PROJECT EVALUATION

Subdivision/Condominium Projects shall be evaluated based on the following:

1. Permits and Licenses issued by the Local Government Unit and other regulatory agencies for the subdivision/condominium project covered by the funding allocation.

2. No outstanding Cease and Desist Order has been issued by HLURB against the developer or any of its related real estate entities.

3. Status of project development - At least with model units for subdivision projects or showroom for condominium projects.

VI. FUNDING ALLOCATION

A. TERMS AND CONDITIONS OF THE ALLOCATION

1. The Fund shall provide a Funding Allocation to the Developer for the takeout of approved applications of eligible Pag-IBIG members, the amount of which shall be based on the Developer's projected submission of applications for each subdivision/condominium project for the year of signing of the MOA. Approval of Funding Allocation shall be in accordance with the prevailing approving/signing authorities.

For this purpose, the Developer shall submit the corresponding monthly schedule of projected submission of applications, with the first submission scheduled not later than sixty (60) calendar days from the date of signing of the MOA.

2. The Developer’s Funding Allocation shall be available from the date of execution of the Memorandum of Agreement to December of the same year, which is alternately called herein as “year of signing.”

3. Utilization of the Funding Allocation shall be as follows:

3.1 The funding allocation is deemed utilized based on the loan amount of applications submitted by the Developer for the given quarter, not on the loan value approved by the Fund.

3.2 At the end of each quarter any unutilized allocation shall be automatically added to the allocation for the succeeding quarter.

3.3 Any unutilized allocation by December of the year of signing shall be forfeited.

4. The Developer shall be required to apply for a new Funding Allocation for the succeeding year and every year thereafter. It shall be evaluated based on the criteria provided in accordance with Item IV Section 1 hereof and classified accordingly pursuant to the Guidelines on the Classification of Developers and the Grant of Incentives.

5. COMMITMENT FEE

5.1 The commitment fee is a charge that shall be imposed on the Developer if it fails to fully utilize the budget allocation in a given quarter. The commitment fee shall be based solely on the funding allocation of every succeeding quarter or the quarter following the quarter in which the Developer failed to meet its scheduled delivery.

5.2 As a rule the DEVELOPER shall not be charged with a commitment fee. However, if at the end of a quarter, the Developer is unable to utilize at least eighty percent (80%) of its budget allocation, it shall be charged with a commitment fee equivalent to one-half percent (1/2 %) of the budget allocation for the succeeding quarter. The unutilized budget of the preceding quarter that was added to the succeeding quarter shall not be considered in computing the commitment fee.

5.3 If by the end of the succeeding quarter, the Developer is able to utilize at least 80% of the budget allocation therefor, excluding the unutilized budget of the previous quarter that was added, the commitment fee collected shall be refunded to the Developer and no commitment fee shall be charged in the following quarter.

6. RELEASE OF LOAN PROCEEDS

The takeout proceeds of housing loans that passed evaluation shall be released to the Developer within three (3) working days from submission of complete documents enumerated in the Notice of Approval, which shall include:

6.1 Deed of Absolute Sale executed by the developer in favor of the Fund or of the Pag-IBIG member-buyer as the case may be;

6.2 Individual Transfer Certificate of Title (TCT) in the name of the Fund or of the Pag-IBIG member-buyer as the case may be;

6.3 Deed of Conditional Sale between the Fund and the Pag-IBIG member-buyer if the TCT is in the name of the Fund, or Loan and Mortgage Agreement if the TCT is in the name of the Pag-IBIG member-buyer;

6.4 Notarized Promissory Note;

6.5 Tax Declaration on the land in the name of the Fund or in the name of the Pag-IBIG member-buyer as the case may be;

6.6 Tax Declaration on the improvements in the name of the Fund or in the name of the Pag-IBIG member-buyer as the case may be;

6.7 Updated Real Estate Tax Receipt for the quarter;

6.8 Occupancy Permit;

6.9 Certificate of Acceptance; and

6.10 Transfer Tax Receipt for lot and building.

A Developer who will request for the split payment of proceeds shall be charged a service fee per additional check.

B. ADDITIONAL FUNDING ALLOCATION

In case the Developer’s funding allocation for the year of signing has been fully utilized before the end of the year, the Developer may request for funding allocation in addition to the amount agreed in the MOA, subject to the following:

1. The Developer’s over-all performance from all Pag-IBIG Fund branches that it is transacting with as of date of request for additional allocation meets or exceeds the criteria for the Developer’s classification as provided in the Guidelines on the Classification of Developers and Grant of Incentives.

2. The Developer has no buyback obligation beyond the prescribed buyback period.

3. Pag-IBIG Fund has available funds for the additional allocation.

4. The Developer has not been downgraded.

VII. DEVELOPER’S WARRANTIES

The Developer shall provide the following warranties:

1. DOCUMENTATION

The Developer warrants that all documents, inclusive of the individual Transfer/Condominium Certificates of Title (TCTs/CCTs) and the corresponding Deeds of Absolute Sale, submitted to the Fund relative to the program, are valid, binding and enforceable in all other respects that they purport to be.

2. TITLE/OWNERSHIP OF PROPERTY

The Developer warrants that it is the lawful owner of the property or in the case of joint venture, that the purported owner lawfully owns the property and has authorized the Developer to develop the property and sell the individually titled saleable units in the subdivision or condominium project, subject of the MOA. Likewise, the Developer warrants that the property is free from all liens, encumbrances and adverse claims, that the title/ownership papers have no vitiating defects.

3. PROJECT DEVELOPMENT AND HOUSE CONSTRUCTION

The Developer warrants that the project shall be developed and completed in accordance with the developmental plans approved by the government agencies and other regulatory bodies concerned, and that the residential units have been constructed in accordance with the plans and specifications approved by the concerned regulatory agencies, as well as with the local ordinances, and that there are no hidden defects whatsoever in the construction of the said units.

The Developer commits to be bound solidarily with the architect, contractor or engineer of the project and agrees to answer for any defects on house construction (except those that are due to normal wear and tear) discovered by the Pag-IBIG member-buyer and/or the Fund within 6 months from acceptance of the residential unit by the Pag-IBIG member-buyer, provided that the defects have been communicated to the Developer and/or the HLURB within a reasonable period after discovery. The developer shall rework/repair the defective residential units to meet the specifications stated in the plan and the standards set by HLURB, despite the transfer of title in the name of Pag-IBIG Fund or the latter's member-borrower. The re-working/repair shall be for the account of the Developer and shall be done within sixty (60) calendar days from receipt of the notice or complaint relative to the house construction defects.

4. ACTUAL DELIVERY OF UNITS

The Developer shall turn over the properties to the Pag-IBIG member-buyers upon release of the takeout proceeds, and the Pag-IBIG member-buyers can occupy these properties immediately.

5. MISREPRESENTATION

The Developer warrants that any person or agent employed by the Developer, or allowed to transact or do business in its behalf, has not committed any act of misrepresentation. The Developer shall answer for damages caused by misrepresentation to the Pag-IBIG member-buyers made by its employees or agents, or that appeared on the marketing brochures.

6. COMPLIANCE WITH LAWS, RULES AND REGULATIONS

The Developer warrants that he complied with all pertinent laws, rules and regulations.

VIII. BUYBACK OF ACCOUNTS

1. Without prejudice to any legal remedy, criminal, civil, or administrative, the Pag-IBIG Fund may, at its option, require the Developer to buyback the accounts affected by breach of warranties, in case the developer fails to correct or cure the breach within the period given. The Fund shall issue a Notice of Buyback to the Developer providing therein the period within which the Developer must buyback the accounts.

2. BUYBACK VALUE

2.1 The buyback value to be charged to the Developer shall consist of the outstanding principal balance, unpaid interest of the Pag-IBIG member buyer and penalties as of date of receipt of Notice of Buyback due to breach of warranties.

2.2 The buyback value shall likewise bear an interest at the rate of 8.5% per annum computed from date of receipt of the Notice of Buyback due to breach of warranties up to actual date of settlement.

2.3 A penalty shall be charged equivalent to 1/20 of 1% of the amount due per day of delay from the expiration of the prescribed buyback period up to date of actual settlement.

3. MODE OF SETTLEMENT

The buyback of the accounts may be carried out through the following:

3.1 Over-the-counter Payment

The Developer shall pay directly to the Fund to settle its buyback obligation, inclusive of penalties if any.

3.2 Offsetting from Takeout Proceeds (OTOP)

In case the Developer fails to buyback the accounts within the period given in the Notice, the Fund shall immediately offset the amount due from the takeout proceeds or from any other amount due the Developer. This offsetting shall continue until the buyback value is fully paid.

4. The Developer may appeal its buyback obligation to the Vice President of the Group concerned solely on the ground that the computation thereof is not in accordance with the policies and procedures of Pag-IBIG Fund. The issue shall be resolved within thirty (30) working days from receipt of the appeal. The period given to the Developer to buyback the affected accounts shall be suspended and no penalties shall be imposed on the outstanding buyback obligation during the period that the appeal is still pending. Upon receipt of the resolution on the appeal, the Developer shall be entitled to the remainder of the period given in the Notice to settle its buyback obligation.

IX. COLLECTION SERVICING AGREEMENT

1. Only Developers who meet the following criteria may enter into a Collection Servicing Agreement (CSA) with the Fund:

1.1 Must have a collection infrastructure;

1.2 Must have internet access; and

1.3 Must at least have a satisfactory financial condition.

2. The Fund reserves the right to reject applications for CSA or its renewal.

3. The Fund and the eligible Developer shall enter into a CSA, providing among others:

3.1 That the Developer shall provide collection assistance to the Fund covering outstanding housing loan accounts within its housing project.

3.2 That the Fund and the Developer shall agree on the accounts that will be enrolled under the CSA prior to the execution of the agreement, which shall be listed in the collection schedule. New accounts that will be taken out after execution of the CSA shall be enrolled for collection only upon mutual agreement of the Developer and the Fund. The Fund shall provide an updated collection schedule monthly.

3.3 That the Fund shall pay a Collection Servicing Fee (CSF) to the Developer for the latter’s services as the Fund’s collecting agent.

4. The Developer shall secure a surety bond from a reputable bonding company that is acceptable to the Pag-IBIG Fund and duly licensed by the Insurance Commission as guaranty for the remittance of collection proceeds, subject to the following conditions.

4.1 Said bond shall be assigned in favor of the Fund to cover the amount that may be collected for a period of one (1) month but are not remitted by the Developer. The amount of the surety bond shall be based initially on the Collection Schedule provided by the Fund. The Fund shall increase the amount of the surety bond or require the Developer to furnish a replacement security if circumstances warrant.

4.2 It shall continue to be in full force and effect until the termination of the CSA.

4.3 The bond must provide that the Fund may call on it after ten (10) calendar days from non-remittance of collections without need of prior demand from the Developer.

5. In lieu of surety bond, the Developer may assign any of the following instruments:

5.1 Certificate of Time Deposit from any of the Top 30 Banks in the Philippines in terms of assets;

5.2 Trust/Escrow Accounts;

5.3 Government Securities; or

5.4 Other assignable instruments acceptable to the Fund.

The value of the instruments above shall not be less than the amount stated in Item IX Section 4.1 hereof.

6. The Fund shall issue Pag-IBIG Fund Receipt (PFR) booklets to the Developer, for which the latter shall be held responsible for the issuance of the corresponding PFRs to Pag-IBIG member-buyers from whom they collect monthly payments. The PFRs to be issued by the Developer shall be stamped with the name of the developer for easy identification and monitoring.

7. The Developer shall deposit the collection remittances to the Fund’s designated bank account in accordance with the following schedule:

Type of Collection	Collection Period	Remittance Date
Cash	Monday to Sunday	Not later than 5pm of the first working day of the week following the applicable collection period.
Check	Monday to Tuesday	Not later than 5pm of the first working day of the week following the applicable collection period.
	Wednesday to Sunday	Not later than 5pm of Thursday of the week following the applicable collection period.

The Developer must submit the collection reports by email to the Treasury Department not later than 12 noon of the working day following the date of collection.

8. The Developer shall be paid a CSF based on his collection performance for the month, which shall be computed in the following manner:

Collection Performance =	Actual Number of Accounts that paid -----------------------------------------------------
	Total Enrolled Accounts at the start of each month

The CSF rate and the corresponding Developer’s collection performance shall be as follows:

Collection Performance		CSF
>95%		2.5%
>90% - 95%		2.0%
>85% - 90%		1.5%
80% - 85%		1.0%

9. If a Pag-IBIG member, whose housing account is endorsed to the collection agent, pays his amortizations to the Developer, the latter shall receive the corresponding collection incentive at the rate it is entitled for the month. Said collection, however, will not be included in the computation of the Developer’s collection performance.

10. Failure of the Developer to remit collections on scheduled date shall subject the developer to a penalty of 12/365 of 1% per day of delay, compounded daily, or P500, whichever is higher, reckoned from actual date of payment of the Pag-IBIG member-buyer to the Developer up to date of actual remittance to the Fund, or the date on which the proceeds of the surety bond sufficient to settle the unremitted amount is actually received by the Fund, if a call is made on the bond.

11. In addition to the penalty charges stipulated above and without prejudice to the Fund’s right to file appropriate action in court against the developer and/or any of its officers, the Fund may also impose singly or collectively the following sanctions, if warranted:

11.1 Cancel the CSA.

11.2 Suspend the acceptance of housing loan applications. The Pag-IBIG member-buyer may file his housing loan application directly to Pag- IBIG Fund.

11.3 Cancel the developer's accreditation and bar the said developer, including its key officers, from any future availment or participation under Pag-IBIG lending programs.

12. The CSA shall be valid for one (1) year from date of execution. However, it may be renewed annually thereafter provided the Developer is able to meet the following criteria:

12.1 The Developer is able to meet the criteria provided in Item IX Section 1 hereof.

12.2 The Developer’s Collection Performance for the preceding year is at least 80%.

X. REPEALING CLAUSE

All memoranda, rules, regulations and other issuances that are inconsistent herewith are hereby repealed, except Circular Nos. 259, 287 and 298, which shall continue to be in force for six (6) months from affectivity of these guidelines. The repeal shall in no way affect contracts entered into by the Fund prior to the issuance of these guidelines.

XI. ESCALATION

Any issue that may arise in the interpretation of these guidelines shall, as much as possible, be resolved by the Department Manager III or escalated to the next higher level of authority.

XII. AMENDMENTS

The Senior Management Committee may amend, modify, revise and/or update the guidelines as needed; provided, the amendments, modifications, revisions and updates thereof, are in furtherance of the objectives of this Program and consistent with the mandate of the Fund under its Charter and existing laws.

XIII. EFFECTIVITY

These guidelines take effect immediately.

(SGD) ATTY. DARLENE MARIE B. BERBERABE
Chief Executive Officer