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Pag-IBIG FundCorporate HeadquartersPetron MegaPlaza Bldg.,

358 Sen. Gil Puyat AvenueMakati City

CIRCULAR NO. 333

TO: ALL CONCERNED

SUBJECT: GUIDELINES ON THE PAG-IBIG FUND DEVELOPMENTAL LOANPROGRAM FOR SOCIALIZED HOUSING PROJECTS FOR THEVICTIMS OF TYPHOON "YOLANDA"

Pursuant to the authority given by the Pag-IBIG Fund Board of Trustees to the SeniorManagement Committee in its 299th meeting held last 13 December 2013, theGuidelines on the Pag-IBIG Fund Developmental Loan Program for SocializedHousing Projects for the Victims of Typhoon "Yolanda" are hereby issued:

I. OBJECTIVE

The Pag-IBIG Fund Developmental Loan Program for Socialized HousingProjects for the Victims of Typhoon "Yolanda" aims to provide a financingmechanism for the development of socialized housing projects in areas that wereaffected by the said typhoon.

II. COVERAGE

Socialized housing projects under this program may be developed in twenty-two (22)project sites distributed in the following priority cities and municipalities:

City Municipality

Tacioban City, LeyteOrmoc City, LeyteCadiz City, Negros OccidentalBaybay City, LeyteRoxas City, CapizPassi City, IloiloBoqo City, CebuSagay City, Negros Occidental

Bantayan, CebuSara, IloiloGuiuan, Eastern SamarEstancia, Iloilo

Management may identify additional priority sites to spur development in typhoonaffected areas if deemed necessary.

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III. LOAN PURPOSE

The proceeds of the developmental loan shall be used for the development ofresidential subdivision for socialized housing projects on a lot identified by the LocalGovernment Unit (LGU) and Pag-IBIG Fund with construction of housing unitseligible for the Fund's Rehabilitation/Reconstruction Loan Program.

No part of the loan, however, shall be used to purchase a parcel of land.

IV. ELIGIBILITY

1. The developer must be accredited by Pag-IBIG Fund under Window 1 in goodstanding and with good track record for the past three (3) years.

2. The developer must at least have an over-all score of seventy percent (70%)based on the credit scoring system to be eligible for the loan. Sixty percent (60%)shall be based on the financial performance of the developer while forty percent(40%) shall be based on the project evaluation.

A comprehensive evaluation of all on-going and prospective projects shall beconducted notwithstanding if only one or more of said projects is the subject ofthe developmental loan.

3. The sales package of the housing units to be generated by the socializedhousing project should not exceed four hundred fifty thousand pesos (P450,000).

The developmental loan shall be granted to the developer once land has beenprovided or identified by the concerned LGU, and upon passing the evaluation.

V. LO AN AMOUNT

The amount of loan to be granted shall be based on actual project need assupported by cash flow projections and shall be based on whichever is lowest of thefollowing:

1. Fifty percent (50%) prudent production cost;2. Developer's debt capacity; and3. Single Borrower's Limit.

However, in no case shall the loan amount exceed One Hundred Eighty MillionPesos (P180 M).

* Prudent production cost shall mean, the relevant cost of the developer of the proposed physicalimprovements, using as basis the standards of HLURB for land development and construction. Theimprovements shall include buildings and utilities within the boundaries of the subject property, costof land and construction costs (contractor's overhead, taxes, plans and supervision, permits,licenses and contingencies) but not including developer's profit or other charges, except forestimated depreciated cost of any existing utilities.

VI. INTEREST RATE

The loan shall bear an interest rate of three percent (3%) per annum.

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VII. LOAN TERM

The term of the loan shall be based on the cash flow projection of the project;provided, it shall not exceed three (3) years.

VIII. COLLATERAL

1. The loan shall be secured by a first real estate mortgage on the real estateproperty subject of development, which should be free from liens andencumbrances.

2. Pag-IBIG Fund shall allow partial releases of collateral; provided that, the loan-to-appraisal value after the release of collateral is maintained at seventy percent(70%).

IX. LOAN RELEASES

1. All loan releases shall be based on the cash flow projection of the project.

2. Prior to loan release, the developer must have infused at least twenty percent(20%) of the prudent production cost as equity. The raw land value shall beconsidered as part of the equity.

3. In case of Joint Venture (JV), wherein the land was contributed by one of theJV partners other than the developer, the developer-partner must infuse at leastten percent (10%) of the construction costs regardless of whether the value ofthe land is enough to cover the equity of the JV. This is to ascertain thecommitment of the developer-partner to the project.

4. The outstanding loan obligation at any given time shall not exceed seventypercent (70%) of the collateral value.

X. LO AN PAYMENT

The loan shall be paid as follows

1. Interest

Interest on the loan shall be paid quarterly, with the first payment due at the endof the first quarter from the date of initial loan release.

2. Principal

Payment to principal shall be made quarterly with the first payment due on orbefore the end of the eighteenth (18th

) month from the date of initial loan release.

3. Application of Takeout Proceeds

Application of takeout proceeds to the outstanding principal shall be based oncash flow projection; provided, it shall not fall below twenty-five percent (25%) ofthe takeout proceeds

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XI. OTHER TERMS AND CONDITIONS

1. Design Standards for Construction of Housing Unit

The developer must comply with the design standards for house construction,which shall be provided by Pag-IBIG Fund.

2. Permits/Clearances

The following permits/clearances must have been secured by thedeveloper/proponent prior to loan approval:

2.1 Development Permit2.2 Environmental Compliance Certificate (ECC) by DENR2.3 OAR Conversion or Exemption2.4 Clearance to Mortgage from the Housing and Land Use Regulatory Board

(HLURB)2.5 License to Sell*

* May be submitted within six (6) months upon receipt of Notice of Approval (NOA),otherwise, the loan application shall be deemed cancelled.

3. Project Appraisal

Appraisal shall be conducted either by Pag-IBIG Fund, private appraisalcompanies or shelter agencies acceptable to Pag-IBIG Fund. In case of thelatter, said appraisal should have been conducted not more than six (6) monthsprior to loan application. The cost of the appraisal shall be for the account of thedeveloper.

4. Project Timetable

4.1 The construction of the project must commence within one (1) year fromreceipt of the Notice of Approval (NOA) and must be fully completed withinthe term of the loan.

4.2 The developer shall deliver the first batch of completed housing units withinthree (3) months from the date of initial loan release.

4.3 Failure to comply within the specified timeframe shall lead to thecancellation of the loan.

5. Loan Processing Fee

The developer shall pay a processing fee of % of 1% of the approved loanamount or fifty thousand pesos (P50,OOO.OO),whichever is lower, inclusive of anon-refundable filing fee of ten thousand pesos (P1 0,000.00).

6 .. Service Fee

The developer shall pay a service fee equivalent to 0.1 % of the amount fordrawdown.

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7. Penalties

Developer who fails to pay his obligations when due shall be charged a penaltyof 1/20 of 1% of any unpaid amount for each day of delay.

8. Developers with an outstanding developmental loan may apply for a newdevelopmental loan; provided, the developer meets the criteria for a new loan.The total debt shall be evaluated at any given time and must not exceed theSingle Borrower's Limit.

9. Cross Default

A default in one developmental loan shall entail a default in the other directdevelopmental loan.

10.Pag-IBIG Fund may set additional requirements/conditions if circumstanceswarrant

11.Pag-IBIG Fund reserves the right to verify and reject applications that are foundunacceptable to the Fund.

XII. APPROVING AUTHORITIES

All applications for direct developmental loan shall be subject to the approval of theappropriate level of signing/approving authorities.

XIII. ESCALATION OF ISSUES

Any issue in the interpretation and implementation of these guidelines shall beresolved by the concerned officer or shall be escalated to the next higher approvingauthorities.

XIV. AMENDMENTS

The Senior Management Committee may amend, modify, revise and/or update theguidelines as needed; provided, the amendments, modifications, revisions andupdates thereof, are in furtherance of the objectives of this Program and consistentwith the mandate of the Fund under its Charter and existing laws.

XV. EFFECTIVITY

This Circular takes effect immediately.

~~dlATTY. DARLENE MARIE B. BERBERABE

Chief Executive Officer

Makati City

JAN 072014

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