National Housing Authority releases guidelines on mortgage amnesty

MANILA, Philippines – The National Housing Authority (NHA) will condone penalty and delinquency charges and allow 50 percent off on accrued or unpaid interest for borrowers who apply for loan restructuring and condonation under Republic Act 9507.

NHA general manager Federico Laxa said the substantial discounts were designed to help beneficiaries update their accounts and meet their monthly obligations.

He added that the condonation program will also boost collection efforts of government.

The guidelines for the implementation of RA 9507 are embodied in NHA Memorandum Circular (MC) No. 2218 dated April 2, 2009.

RA 9507 was signed by President Arroyo last October and its implementing rules and regulations were formulated by the government shelter agencies under the supervision of the Housing and Urban Development Coordinating Council (HUDCC).

Covered by the loan restructuring and condonation program are outstanding residential accounts or loans with principal amounts not exceeding P2.5 million which have cumulative arrearages equivalent to at least three monthly amortization as of 16 March 2009, notwithstanding availment of previous condonation programs.

Laxa said NHA will condone all penalty/ delinquency charges and fifty percent of accrued/unpaid interest based on the approved application.

For borrowers who opt to settle their account prior to maturity, a 20 percent rebate on outstanding principal balance after updating shall be granted.

He said the restructured loan account will consist of an interest bearing portion, which is the total outstanding principal balance, and a non-interest bearing portion which will be the uncondoned portion of accrued interest to be paid in equal monthly amortizations during the term of the loan.

The maximum repayment period of the restructured loan is 30 years for individual accounts and accounts of community associations, and 10 years for project implementations.

Housing beneficiaries may start applying for restructuring and condonation starting May 4, 2009.

The interest bearing portion of the restructured loan will have the following interest rates: six percent per annum for accounts with original loan amount of P400,000 and below; seven percent for those between P400,000 to P700,000; and 10.5 percent for those above P700,000.

Under MC 2218, NHA provides incentives for updated accounts and remedies on delinquent accounts.

Laxa said at least 100,000 homebuyers across the country will benefit from the restructuring and condonation program of the government.