HGC scheme realigns banks, builders & buyers

MANILA, Philippines - The Home Guaranty Corp. (HGC) is launching a nationwide program to boost lending by banks and borrowings by developers and home buyers. Dubbed “B-B-B” (Bankers-Builders-Buyers), the program aims to create a pool of banks to lend developmental loans to home builders for sale to qualified buyers. This will realign banks, builders and buyers in a housing circle fully complementing each others’ functions and needs.

The “B-B-B” program is in response to Vice President and Housing and Urban Development Coordinating Council (HUDCC) chairman Jejomar C. Binay’s directive to key shelter agencies to formulate innovative strategies to address the nation’s housing backlog.

HGC president Manuel R. Sanchez said that the B-B-B program is part of HGC’s mandate of mobilizing private funds for housing and promoting easier access to housing finance. Banks and other financial institutions, by the nature of the business are averse to risk. HGC provides the unconditional guaranty of the Republic of the Philippines on housing loans extended by banks – making their loans risk-free. Most of the country’s established banks are already availing of HGC guaranty. In 2011, HGC guaranteed P37.89 billion worth of housing loans from banks enrolled in HGC Guaranty programs.

According to Sanchez, “we have eliminated credit risks of housing loans extended by banks” and “through B-B-B, we will encourage more banks to avail of HGC guaranty to lend more for housing. We will match the loans with builders and buyers.” HGC grants guaranty coverage on loans extended by banks to developers for their working capital, home construction and marketing needs. Through B-B-B, developers are further encouraged to bring prospective buyers to banks to avail of HGC-guaranteed retail accounts. HGC will soon sign MOAs with builders, realtors and brokers’ groups to complete the housing circle.

HGC’s B-B-B program will bring this new concept of housing finance and lending to the provinces and the countryside. Aside from targeting provincial branches of established commercial and universal banks, HGC also provides guaranty lines to rural banks, thrift banks, building and loan associations, and even microfinancing. For 2012, HGC targets marketing its guaranty to over 400 such institutions nationwide.

HGC will popularize home buying through the Housing Circle.

Homeownership starts with pointing prospective home buyers in the right direction to find affordable housing and to find banks to finance their house purchase. Information and credit education are key components of the B-B-B program.

Through the online-B-B-B database, currently being developed, prospective home buyers can readily access information on the nearest housing developments and HGC-guaranteed source of home financing. Whenever possible, forms, loan requirements and other related information will also be made available online.

“B-B-B aims to help home buyers overcome their natural aversion to bank borrowing due to the false belief that they will never qualify for a housing loan,” Sanchez said. “We are also teaching them to self-qualify for housing loans and plan for home ownership.” The B-B-B program is anchored on Binay’s advocacy of “Mas maganda ang buhay, kung may sariling bahay.”