Frequently Asked Questions (FAQ's)

  1. What is the role of the Home Guaranty Corporation in the government's shelter program? How does it differ from the roles of the Home Development Mutual Fund (HDMF or the Pag-IBIG Fund) and the National Home Mortgage Finance Corporation (NHMFC)?

    HGC supports homeownership among Filipinos by encouraging banks and financial institutions to lend to individual home buyers and housing developers. It assures lenders and investors in housing by issuing loan and securitization guarantees. The HMDF/Pag-IBIG Fund and NHMFC, however, directly lend money to housing developers and individual/group borrowers.

  2. What are the benefits of the HGC Guaranty?

    1. It guarantees the payment of the guaranteed loan or investment balance outstanding and due on the principal obligation, plus interest yields of up to 11%;
    2. It exempts the interests derived and other yields from the loan from all forms of taxes(up to 11% rate of interests);
    3. For socialized housing, those with contract prices of P 400,000.00 and below are entitled to the maximum cover and tax-exempt interest of up to 11%, and;
    4. The Government of the Republic of the Philippines guarantees the payment of HGC's obligations.
    5. Home loan borrowers can borrow up to 90% of the appraisal value of collateral property.
    6. Banks are exempt from the Banko Sentral ng Pilipinas (BSP) capital reserve requirement for HGC guaranteed loans
    7. Banks are freed-up from administrative burden when a loan defaults

  3. What are the guaranty programs of the HGC?

    1. Developmental Loan Guaranty, which covers loans extended to developers for the development of subdivisions, townhouses, dormitories, apartments and other residential dwellings.
    2. Retail Loan Guaranty, which covers loans and credit facilities extended for the purchase / acquisition of a single family residence.
    3. Guaranty for Securitization Schemes, which provides guaranty cover on securities and/or financial instruments or on the receivables backing-up the securities.

  4. Who may avail of HGC guaranty? How?
  5. Banks, government and private financial institutions, housing developers, and Building and Loan Associations (BLAs) may avail themselves of the HGC Guaranty. These institutions must apply for a Guaranty Line from HGC. Upon approval, they may enroll their accounts against their approved Guaranty Line.

  6. Why was the HGC Charter amended?
  7. The corporate life of the HGC expired in 2000. To ensure that its mission of promoting home ownership by providing a viable system of guaranty for the housing sector shall continue, the HGC Charter was amended, which among others, has extended HGC's corporate life for another fifty (50) years.

  8. What are the salient points of Republic Act 8763 or the HGC Act of 2000?

    1. It gave the HGC another fifty (50) year corporate life;
    2. The name of the Corporation was changed from Home Insurance and Guaranty Corporation (HIGC) to Home Guaranty Corporation (HGC);
    3. The authorized capital stock was increased from PhP 2.5 billion to PhP 50 billion;
    4. Included the Secretary of Finance and the Director General of the National Economic and Development Authority (NEDA) as Chairman and ex-officio member of the HGC Board of Directors, respectively;
    5. Transferred the supervision and regulation of Homeowners' Associations to the Housing and Land Use Regulatory Board (HLURB);
    6. Mandates HGC to promote the secondary mortgage market and;
    7. Prioritizes socialized and low-cost housing projects.

  9. What is a Building and Loan Association (BLA)? What is the role of HGC on BLAs?
  10. BLA encourages and promotes affordable means of capital formation for housing. The HGC is mandated to issue contracts of guaranty for the accounts of the BLAs.

  11. Why does HGC have Acquired Assets/Properties?
  12. In the event that the borrowers defaulted in their amortization payments, the bank calls on the guaranty of the HGC. Upon payment by the HGC of its guaranty obligations the banks subsequently assign all their rights over the assets / mortgages to HGC.

  13. How does HGC recover from/dispose of its Acquired Assets/Properties?
  14. If the original borrower cannot pay the arrears, HGC will accept purchase proposals from interested buyers, and in compliance with all governing laws regarding the sale of acquired and foreclosed properties of government agencies.

    The property/ies shall be sold on an “AS IS, WHERE IS” basis.

    Negotiated offers may be made in cash or on terms, on special cases.

    1. Cash Purchase


    2. Payment Period
      Discount Rate
      Spot Cash
      15%
      30 days
      10%
      60 days
      6%
      90 days
      3%

    3. Installment Term (In-House Financing Terms)

      Minimum Downpayment: 10% of Selling/Contract Price

      1. Balance of the bid price shall be payable for a maximum period of thirty (30) years at the following interest rates:


      2. Sales Package Interest Rate
        Up to P400,000.00 6%
        P400,001.00 to P2.0 m 9%
        More than P2.0 m 12%

        Prompt Payor Discount: 1% of the Contract interest rate if payment is made on or before the due date

      3. No interest or 0% interest if the balance of the contract price is paid within a period of 12 months.

    4. Take-Out by Bank/Financial Institution
    5. The buyer may apply for a housing loan from a bank or any financial institution to settle the balance of the purchase price, after deducting the required 10% downpayment, to Home Guaranty Corporation.

    6. Rent-To-Own Program

      1. Maximum period of five (5) years;
      2. Initial cash out : 2 months advance and 1 month deposit (rental fee)
      3. Portion of payments made by the Lessee during the term of the lease shall be applied as downpayment for the purchase of property.

    7. Bidders are Required to Pay a Bid Security (BS)
    8. Upon submission of his/her offer to purchase any of HGC's properties sold on retail basis. The amount of BS shall depend on the sales package of the property, as shown below:

      Salees Package Bid Security
      P400,000.00 and below P5,000.00
      P400,001.00 to P2.0 m P10,000.00
      Above P2.0 m P15,000.00


    9. Documentary Requirements:


    10. For Individuals For Companies / Corporation
      1. Photocopy of Community Tax Certificate, Passport of Driver's License
      2. One 2" x 2" I.D. picture
      3. Proof of Income (latest Income Tax duly stamped received by BIR, Certificate of Employment and Compensation, Certified copy of latest payslip)
      4. Photocopy of Company I.D.
      1. SEC registration, Articles of Incorporation, Business Permit
      2. Audited finacial statement for the last two (2) years stamped received by BIR
      3. Board Resolution and Secretary's Certificate

      For more details, please visit our website at www.hgc.gov.ph or call (02) 897-3149 or (02) 896-0425.

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