Pag-IBIG Housing Loan: A Comprehensive Guide on How to Avail

As a member of the Home Development Mutual Fund (HDMF), or simply Pag-IBIG Fund, you are entitled to participate in membership and savings, short-term, and housing loans.

What is Pag-IBIG Fund?

HDMF was established to address a two-pronged need: 1) a national savings program and 2) a shelter financing for the Filipino workers. The Fund was created under Presidential Decree No. 1530.

Pag-IBIG Fund then operated under the National Home Mortgage Finance Corporation, under the Ministry of Human Settlements. It became an independent agency on June 4, 1979, by virtue of Executive Order No. 538.

Today, Pag-IBIG remains to be the single largest source of home financing in the Philippines.

Before discussing how to avail a Pag-IBIG housing loan, let’s take a look at these figures first.

Key stats about Pag-IBIG housing loan

  • Pag-IBIG has 113 branches nationwide and 20 overseas posts
  • In 2018, PagIBIG had a total of 14.02 million members (10.54 million private workers, 2.12 million government employees, 1.06 million overseas Filipino workers (OFWs), and 300,000 other working groups)
  • In 2019, Pag-IBIG housing loans were at their highest ever home loan takeout at Php86.74 B, up by 15% from 2018
  • In 2019, it also had the highest ever number of housing loan borrowers at 95,276, up by 5% from 2018
  • In 2019, there are 27,145 socialized housing loan borrowers with a total of Php10.64 billion loan amount
  • An OFW avails 1 in every four housing loans for a total of 146,443 loans that amounted to Php131.8 billion
  • Pag-IBIG has the lowest interest rates on housing loans at 5.375% for regular and 3% for socialized housing loans

What are the purposes of the Pag-IBIG housing loans?

Borrowers who may wish to avail the housing loan may use the proceeds for:

  • Purchase of a residential lot or adjoining lots not exceeding 1,000 sq.m., including the cost of the transfer
  • Purchase of a residential house and lot, townhouse, or condo unit (old, brand new, Pag-IBIG Fund-mortgaged property, or adjoining) including the parking slot, including the cost of the transfer
  • House construction
  • House improvement
  • Existing housing loan refinancing
  • Or a combination of these purposes

What are the Pag-IBIG housing loan eligibility requirements?

A borrower must:

  • Be an active member with at least 24 monthly savings
  • Not be more than 65 years old on the date of the loan application and not be more than 70 years old on the date of loan maturity
  • Have a legal capacity to acquire and encumber a real estate
  • Not have any Pag-IBIG housing loan at present nor a foreclosed, canceled, bought back, or voluntarily surrendered loan
  • Have updated payments for borrowers with an existing housing or short-term loan

What are the documentary requirements when availing the housing loan?

For the borrowers, the following documents are required:

  • Two copies of the housing loan application with a recent ID photo of the borrower (HQP-HLF-068) and co-borrower (HQP-HLF-069) if applicable
  • Proof of income (see list below)
  • One copy of valid ID (see list below) photocopied, back to back of the principal borrower and spouse, co-borrower and spouse, seller and spouse, developer’s authorized representative, and attorney-in-fact if applicable
  • Notarized borrower’s conformity (HQP-HLF-108) if purchasing through a Pag-IBIG accredited developer

List of applicable proof of income

Pag-IBIG has different sets of income documentation requirements as follows:

  • Notarized certificate of employment and compensation (CEC) with a breakdown of the gross monthly income, allowances, and other monetary benefits
  • Latest income tax return (ITR)
  • Certified one month payslip within the last three months prior to the loan application date

Note: For government employees, the CEC or ITR and payslip must be submitted together

  • ITR, audited financial statements, and official receipt of tax payment from the bank (supported with Department of Trade and Industry (DTI) registration, and mayor’s permit or business permit)
  • Commission vouchers bearing the issuer’s name and contact information for the last 12 months
  • Bank statement or passbook for the last 12 months for income sourced through foreign remittances or pensions
  • Copy of lease contract and tax declaration for rental business owners
  • Certified true copy of transport franchise issued by the Land Transportation Franchising and Regulatory Board (LTFRB) or local government unit (LGU) for tricycle operators
  • Certificate of engagement issued by a business owner
  • Other documentary evidence validating the source of income
  • Employment contract (between employer and employee or Philippine Overseas Employment Administration (POEA) standard contract
  • CEC (written on the employer or company’s official letterhead or signed by an employer and supported by the photocopy of the employer’s ID or passport)
  • ITR with the host country or government

List of valid IDs

  • Passport (issued here in the Philippines or foreign country)
  • Professional Regulation Commission (PRC) ID
  • Social Security System (SSS) ID
  • Government Service Insurance System (GSIS) ID
  • Government office ID
  • Integrated Bar of the Philippine (IBP) ID
  • Overseas Workers Welfare Administration (OWWA) ID
  • Seafarer’s Identification and Record Book (SIRB)
  • Company ID
  • Driver’s license
  • Voter’s ID
  • Postal ID
  • Senior Citizen Card
  • OFW ID

What are the steps in housing loan availment from Pag-IBIG?

Below are the six steps you need to go through when availing a housing loan.

There are seven requirements that you must prepare to proceed with the loan application process. These are the:

  • Housing loan application
  • Vicinity map of the property
  • Updated tax declaration and tax receipt
  • Additional requirements by loan purpose
  • Proof of income
  • Valid IDs
  • Certified true copy of the title

Bring the requirements to JELP Business Solutions Building, Shaw Boulevard, Mandaluyong City. Alternatively, you may submit them to any Pag-IBIG branch near you.

Make sure that the information are accurate, correct, and complete.

The NOA and LOG can be claimed at the Servicing Department, second floor, of the same address noted in Step 2.

Pag-IBIG processes both documents for 17 working days.

Before the release of the loan proceeds, you must submit the NOA requirements such as the:

  • Transfer certificate of title (TCT) bearing the name of borrower/co-borrower or true copy of the TCT
  • Updated tax declaration and tax receipt in 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 notarized promissory note)

Pag-IBIG gives the borrowers 90 days to accomplish the said requirements.

Bring the annotated documents to the Serving Department.

The loan proceeds will be released to the borrower after ten working days.

Monthly amortization starts a month after the check date.

How much can be borrowed?

Although the Fund says that borrowers can avail of up to Php6 million housing loan, the amount differs.

The actual amount that a borrower may receive depends on certain factors such as the exact amount needed and the loan entitlement based on the borrower’s capacity to pay or the property’s loan-to-appraised value ratio. For the latter, whichever is the lower applies.

What are the prevailing interest rates for a housing loan?

Based on the table of interest the Pag-IBIG Fund issued on January 1, 2019, the following fixed pricing period interest rates apply. 

Fixed pricing period Interest rate
1 year 5.375%
3 years 6.375%
5 years 7.270%
10 years 8.035%
15 years 8.585%
20 years 8.800%
25 years 9.050%
30 years 10.000%

So it is between 5.375 and 10% depending on the chosen loan tenor, which could be up to 30 years.

What are the available modes of payment?

Pag-IBIG has extended its list of modes of monthly mortgage payments. It now includes:

  • Salary deduction through an Employer Collection Servicing Agreement (CSA)
  • Post-dated checks
  • Direct payment to the accredited developer with CSA with the Fund
  • Auto debit arrangements with a bank
  • Accredited collection partners such as accredited banks (Asia United Bank (AUB), LandBank of the Philippines, Metrobank, and United Coconut Planters Bank (UCPB); SM Bills Pay, ECPay, Bayad Center, MLhuillier, Globe Gcash, PayMaya, and CashPinas

Apparently, Pag-IBIG embraces the utility of online facilities. Aside from the over the counter options to pay for the monthly amortization, borrowers have the option to pay online and through mobile applications.

You have to need the Housing Account Number (HAN) when paying either over the counter or online.

Other tips when availing a Pag-IBIG housing loan

  • Use the home loan calculator at the Fund’s website to have a clearer grasp of whether your income qualifies and how much you can borrow based on such, and how much you can borrow based on the value of the chosen property.
  • Prepare all the necessary documents before applying for the housing loan. This would increase your chances of getting the loan approved.
  • If you have any outstanding loan(s) with the Pag-IBIG Fund, settle them first. This also increases the chances of approval.
  • Pay a higher down payment amount and choose the shortest possible loan tenor to lower your monthly payment.