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For Retail Guaranty Line
Terms and Conditions


 1. Title
  • Loan is covered by a clean title registered in the name of the developer or the buyer.
 2. Housing Unit
  • Housing unit is fully completed upon release of the loan.
 3. Land Development
  • The property/area where the unit is constructed is fully developed in accordance with the standards of HLURB.
 4. Location
  • Housing unit must be located in a developed subdivision or in an area that is classified as residential, near centers of business, commerce and employment and in areas with access to basic community facilities such as: water, electricity, transportation.
 5. Loan Limit
  • The principal loan value for guaranty coverage must not exceed the appraised value of collateral based on the limits as shown below:
Housing Package Loan Limit
P400,000 and below 90% of collateral value
Above P400,000 to P3.0m 90% of collateral value
Above  P3.0M to  P4.0m 80% of collateral value
Above P4.0m 70% of collateral value

 6. Borrower’s Payment Capacity (Credit Ratio)
  • The loan amortization should not exceed 40% of borrowers Net Disposable Income (NDI), defined as follows:

    • NDI = Gross Monthly Income – (Taxes + SSS or GSIS Contribution + PhilHealth Contribution + HDMF Contribution

    Loan Amortization=Principal Obligation + Interest + Fire Insurance Fee + Mortgage Redemption Insurance Premium + Real Property Tax

 7. Down payment or Buyers Equity
  • The amount of down payment shall be as follows:
Type of Housing Package Sales Packages Minimum Equity/ Downpayment
Socialized Housing P 400,000 & below 10%
Low-cost Housing Above P400,000 up to P3.0 M 10%
Medium-cost Housng Above P3.0 M up to P4.0 Million 20%
Open Housing Above P 4.0 Million 30%

 8. Due Diligence
  • Appraisal
    • The bank shall conduct an appraisal of the collateral to ensure that the loan is fully secured prior to loan release.

    • HGC shall conduct an appraisal of the collateral upon call on the guaranty to ensure recovery of guaranty exposure.

  • Credit Investigation
    • Legal Review of documents
    • Title verification
 9. Seasoning
  • Regular amortization of at least 24 months should have been paid by the borrowers under CTS documentation.
 10. Security
  • REM or Deed of Assignment of Receivables
 11. Guaranty Coverage and Tax Exemption
  • The extent of guaranty coverage on the principal and on the interest earned shall be as follows:
Type of Housing Package Guaranty on Outstanding Principal Guaranty on Interest or Yields Earned
Socialized housing 100% Up to 11.0%
Low  cost housing 100% Up to  10.0%
Medium  cost housing 100% Up to    9.5%
Open  housing 100% Up to    8.5%

  • Interest earned on guaranteed accounts shall be exempt from all forms of taxation to the extent shown below:

Type of Housing Package Tax   Exemption on Interest Income
Socialized Housing 11.0%
Low cost housing 10.0%
Medium cost housing 9.5%
Open Housing 8.5%

 12. Premium
  • The annual guaranty premium shall be subject to the following guaranty premium fee based on outstanding guaranty as follows:
Sales Packages Premium Rate
Standard Bond
P400,000 & below 1.40% 1.20%
Above P400,000 to P3.0m 1.45% 1.15%
Above P3.0M to P4.0m 1.50% 1.10%
Above P4.0m 1.70% 1.50%

  • Premium discounts may be given to clients with large value of enrollments and no record of call.
 13. Default Definition
  • 6 months non-payment of monthly amortizations
 14. Requirements upon filing of claim
  1. Notice of call
  2. A detailed Statement of Account of the borrower
  3. Statement of Application of Payment duly certified by the Bank
  4. Bank’s Credit Approval or Evaluation Sheet
  5. Photocopy of Transfer Certificate of Title (TCT)
  6. Appraisal report at the time of loan
  7. Latest appraisal report on the property
  8. Duly notarized Special Power of Attorney executed by the Bank authorizing HGC to take possession of the mortgaged property
  9. Copy of Notice to borrower that his account is covered by HGC guaranty
  10. Copies of demand letters to borrower
  11. Photocopy of Tax declaration for lot and building
  12. Lot plan duly signed by a Geodetic Engineer
  13. Technical Plans, if applicable
  14. Copy of restrictions annotated in the title, if applicable
    • Additional requirements for Real Estate Mortgage accounts:

  1. Copy of Real Estate Mortgage
  2. Copy of Loan Agreement
  3. Copy of Promissory Note
    • Additional requirements for Contract-to-Sell accounts:

  1. Contract-to-Sell
  2. Photocopy of Deed of Assignment and Conveyance in favor of the Bank or Purchase Agreement
  3. Developer’s Credit Approval or Evaluation Sheet of the Buyer
 15. Requirements prior to payment
  1. Original registered Deed of Assignment and Conveyance (DOAC), transferring to the HGC all the Bank’s rights, title and interest over the loan documents and mortgage contract, and in the mortgaged property it has acquired
  2. Original updated tax certificates and official receipts covering the tax payments on the mortgaged property
  3. Original endorsement of Fire Insurance Policy to HGC
  4. Owner’s copies of the Transfer Certificate of Title (TCT), Original Certificate of Title (OCT), Condominium Certificate of Title (CCT), whichever is applicable, with annotation of the DOAC
  5. Original copy of Notice to the Borrower, duly received by the Borrower, that the account has been assigned to HGC
  6. Original Tax Declaration for lot and building

    • Additional requirements for Real Estate Mortgage accounts:

    1. Original copy of Real Estate Mortgage
    2. Original copy of Loan Agreement
    3. Original copy of Promissory Note

    • Additional requirements for Contract to Sell accounts:

    1. Original copy of Real Estate Mortgage
    2. Original copy of Loan Agreement
    3. Original copy of Promissory Note

  7. Original certification by the Bank that there are no pending claims from the buyers under the Maceda Law on the properties to be assigned to HGC
  8. Original Deed of Cancellation of the CTS
  9. Original certification that the property subject of CTS is vacated by the previous owner upon payment by the HGC
  10. Original Deed of Assignment between the developer and the Bank or Purchase Agreement
    • Non-submission of any of the above-mentioned documents shall be a ground for denial of call.
 16. Termination of the Contract of Guaranty
  • Non-payment of guaranty premiums and penalty fees
  • Violation of the Bank of any of its warranties
  • Transfer or assignment of the Contract of Guaranty to another person or entity without prior written consent of the HGC
  • Disposition by the Bank or by an approved transferee or assignee of an interest in the mortgage through a declaration of trust or some other device without prior written consent of the HGC
  • Non-compliance by the Bank or by an approved transferee or assignee with any of the terms and conditions of the Contract of Guaranty.
  • Any misrepresentation committed by the grantee (bank/developer) on any matter or account is arising from or in connection with the subject guaranty.
  • In case of termination and cancellation of the contract due to any of the foregoing, all premium paid shall be forfeited in favor of HGC
 17. Cancellation of Unavailed Guaranty Line
  • HGC may cancel the unavailed Retail Guaranty Line subject to thirty (30) calendar day prior written notice given to the Bank, under the following conditions:
    1. Post audit of the Retail Guaranty Line strongly evinces violations by the Bank of its warranties.
    2. The credit evaluation guidelines and procedures of the Bank are no longer acceptable to the HGC.
    3. The Retail Guaranty Line has been unavailed for six (6) months from date of execution of the Contract.
    4. The Bank is unable to perform the accounts management and credit supervision functions required by the HGC.
    5. The Bank has been declared insolvent or has filed for suspension of payment with the Securities and Exchange Commission or other appropriate government agencies.
 18. Audit
  • HGC shall audit the individual Borrower’s/Mortgagor’s loan documents enrolled against the Retail Guaranty Line subject to prior written notice to the bank.
 19. Client Rating
  • BSP CAMELS Rating of at least “3”
  • HGC Rating of at least “Satisfactory”