CONGRESS OK’S IRRS OF LOAN RESTRUCTURING LAW
February 25, 2009

VICE President Noli “Kabayan” De Castro today informed that Congress has approved the Implementing Rules and Regulations for Republic Act No. 9507, or An Act to Establish a Socialized and Low-Cost Housing Loan Restructuring and Condonation Program, Providing Mechanisms Therefor and for other Purposes.

“Alam naman natin na talagang mahirap ang buhay ngayon dahil sa global economic crisis, kaya ginagawa natin ang lahat para hindi ma-foreclose yung mga bahay ng ating mga kababayan lalong-lalong na yung nasa low-income bracket. Dahil sa batas na ito, mapagpapatuloy na nila yung pagbabayad sa kanilang buwanang loan amortization”, De Castro said.

Under the program, housing loan borrowers who have at least three months of unpaid monthly amortizations with Government Financial Institutions (GFIs) and housing agencies may apply for loan restructuring and condonation.

The law covers housing loan accounts with institutions like GSIS, SSS, Pag-IBIG Fund, National Home Mortgage Finance Corporation (NHMFC), Social Housing Finance Corporation (SHFC), Home Guaranty Corporation (HGC) and National Housing Authority (NHA), with principal loan amounts not exceeding P2.5 million.

The program is open even to accounts that have already availed of a previous restructuring and condonation program.

All penalties and surcharges of a loan approved for restructuring under this program shall be condoned. A reasonable portion of the accrued interest may also be condoned at the discretion of the respective boards of the concerned GFIs or housing agencies.

The remaining accrued interest will be treated as a non-interest bearing principal to be equally paid during the term of the restructured loan.

The restructured loan will also be charged an interest rate equal to that of the original loan, or not more than 12%, whichever is lower.

To further lower the monthly amortizations, the payment period may be extended up to the borrower’s 70th year.

No processing fees or down payment shall be paid to apply for loan restructuring and condonation.

The program will be implemented for 18 months from the issuance of the implementing rules and regulations (IRR), but the governing boards of the respective institutions are given the authority to continue the program beyond that period.

President Arroyo lauded the timeliness of the law for the nearly 370,000 families with delinquent loans, especially during this time of global economic crisis.

Meanwhile, De Castro assured that the law will not threaten the financial stability of the concerned institutions and agencies as there are specific provisions that will safeguard the program from abuse.

De Castro has earlier announced the government housing sector will contribute P82 billion this year to the economic stimulus package under the Arroyo Administration.

home   |   Press Release main page   |