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COMMUNITY MORTGAGE PROGRAM (CMP)

COMMUNITY MORTGAGE PROGRAM (CMP). HOUSING SITUATION IN THE PHILIPPINES. The Philippines is one of the fastest growing countries in Asia in terms of population, growing at the rate of 2.11% per year.

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COMMUNITY MORTGAGE PROGRAM (CMP)

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  1. COMMUNITY MORTGAGE PROGRAM (CMP)

  2. HOUSING SITUATION IN THE PHILIPPINES The Philippines is one of the fastest growing countries in Asia in terms of population, growing at the rate of 2.11% per year. Current population is estimated at 94 million and is projected to reach 111.7 million in 2020. About 63%, or 59 million, live in urban areas of which over 1/5 are in Metro Manila.

  3. HOUSING SITUATION IN THE PHILIPPINES PROJECTED HOUSING NEED 5.73 M 3.76 M 2005-2010 MEDIUM TERM PHILIPPINE DEVELOPMENT PLAN 2011-2016 PHILIPPINE DEVELOPMENT PLAN (NEW) 50% (2.86 M) OF THE PROJECTED HOUSING NEED IS FROM NCR, CENTRAL LUZON, AND CALABARZON

  4. HOUSING NEED 2011-2016

  5. HOUSING TARGETS FOR 2011-2016 52% 48% Indirect Housing Provision Direct Housing Provision • NHA Housing Production (including resettlement, slum upgrading, and medium-rise housing • Community Mortgage Program • HDMF End-user Financing • HUDCC Proclamations • HGC Retail Guarantee • HLURB Licence to Sell and CLUP Assistance 2,017,193* UNITS * TOTAL DOES NOT CORRESPOND WITH THE ACTUAL SUM

  6. DIRECT HOUSING TARGETS 44% 14% Community Mortgage Program NHA Housing Production 1,724,000* 0.004% UNITS HUDCC Proclamations (or an annual target of 10) 42% Retail and Developmental Financing (mainly PAG-IBIG) * TOTAL DOES NOT CORRESPOND WITH THE ACTUAL SUM

  7. INFORMAL SETTLERS Proportion of Households in Informal Settlements SOURCES: FIES, NSO AS CITED IN THE DRAFT 2011-2016 NEW DEVELOPMENT PLAN

  8. SHFC MANDATES • Created by Executive Order No. 272 (20 January 2004) • Ma. Ana R. Oliveros – President Eduardo T. Manicio – Executive Vice President • Mandated : • To undertake Social Housing Programs for informal and formal sectors in the low income bracket. • To administer the Community Mortgage Program (CMP) and Abot-Kaya Pabahay Fund (Amortization Support Program and Developmental Loan Financing

  9. WHAT IS THE CMP? • The Community Mortgage Program (CMP) utilizes an innovative system of mortgage financing whereby an undivided tract of land may be acquired by several beneficiaries through the concept of community ownership for subsequent individualization of the mother title under the name of the member-beneficiaries.

  10. LOAN DETAILS • Interest rate: 6% per annum • Maximum term: 25 years payable in equal monthly payments • Loan Repayment: one (1) month after the release of the loan proceeds

  11. PROJECT CLASSIFICATION ON-SITE Members of the community association (CA) are already living/residing in the project site  Community has been in existence for five (5) years  85% occupancy rate at the time of application and 100% after two (2) years from loan release  Maximum of 200 beneficiaries OFF-SITE Homogeneous group who decides voluntarily to transfer to another area.  community-driven  threat of eviction, calamities, disruptive effects of govt. infrastructure projects  A CA of which 30% of its members come from an existing core group of residents from low-income/informal sector of the same city (geographical)  A group that has been formally organized for at least one year prior to application, and bound by commonalities such as low- income occupation and sense of purpose or objective (occupational/sectoral)  Beneficiaries Eligibility - Filipino citizen - homeless and underprivileged - legal age (18-60 yrs. old) - no lot/housing loan - not a professional squatter

  12. COMMUNITY ASSOCIATION LANDOWNER Amortize Loan* MOBILIZER (CMP-M) (LGU/ NGO/ NHA) SHFC CMP PROCESS FLOW (MACRO) Assist the CA Offer to Buy Letter of Intent to Sell Pay Landowner Deliver Documents *Collecting Agents SHFC (main/regional offices) LBP

  13. Service Fee – P 1,000.00 per member or 2% of loan amount whichever is higher: • CMP-M[LGU, NGOs, Other Government entity (i.e. NHA)] • Study and profile prospective groups of informal settlers for possible assistance • or intervention • Assist and guide the CA in their functions • Educate and assist the CA in gathering and completing CMP loan requirements, and informing them of CMP standards and policies • Assist in site analysis and evaluation, and in the identification of deficiencies and development needs • Advise the CA in negotiating with landowners • Assist in values formation and in bringing out potential issues that may affect the viability of the loan application • Assist the CA in accessing support from LGUs and othe potential sources of support Qualifications:  Must be duly a registered stock or non-stock corporation;  Must have had at least two (2) years tract-record in subdivision/housing development and/or in community-based social and economic assistance activities;  Must have organizational capabilities to assist in the documentation of the loan and mortgage and orient the members thereof on the duties and responsibilities of a landowner-debtor If an LGU, must have a housing division/department tasked with processing CMP projects. * CMP-Ms should maintain a CER of at least 80 percent.

  14. Local Government Unit (LGU) Social Housing Finance Corporation Localized Community Mortgage Program

  15. WHAT IS THE RATIONALE OF THE LCMP? • The LCMP seeks to contribute to the fulfillment of the LGUs mandate (per RA 7160 and RA 7279) of implementing a comprehensive and continuing urban development program and uplift the conditions of the underprivileged and the homeless in their respective localities. • The LCMP will serve as a vehicle that will enable the LGUs to maximize the utilization of their limited housing budget, with SHFC providing an additional funding equivalent to 75% - 90% of the project cost thereby increasing their budget utilization to four times to ten times (4x – 10x) the original amount.

  16. WHATIS THE LCMP? • Qualified partner-LGUs may apply for an Omnibus Commitment Line (OCL) with a one (1) year validity from date of approval made available by SHFC based on projects identified by the partner-LGUs. • The OCL shall not exceed P50,000,000.00 per LGU. • The projects that may be enrolled under the partner LGU’s OCL shall be as follows: • > On-site projects – for the purpose of acquiring the land occupied by their informal settlers; or • > Off-site projects – for the purpose of acquiring and developing the land where informal settlers (covered by court eviction order, residing in danger zones, or voluntary transfer of one or several communities from the locality) will be relocated through the concept of community ownership

  17. As partners in this undertaking, the SHFC will have a 75% - 90% share in the project cost while the equity required from the partner-LGU are as follows: • - Twenty-five percent (25%) of the project cost for 1st to 4th class cities; or • - Ten percent (10%) of the project cost for 5th and 6th class cities and municipalities • The equity of the LGU in the project cost can come in any of the following form: • -Land owned by the partner-LGU to serve as site of the project; • - Cash financing to pay-off the lot price (privately owned land); or - Site Development

  18. WHAT ARE THE ROLES OF THE PARTNER-LGU? • Identifies priority urban poor communities/social housing projects and enroll the same under the OCL; • Enters into a Memorandum of Agreement with SHFC undertaking to perform its role in the LCMP and to abide by the guidelines of the Program; • Performs all pre take-out functions in accordance with SHFC policies and guidelines as follows: • - Accreditation of Non-Government • Organizations (NGOs)/Private Organizations(POs) • as CMP Mobilizers; • - Background Investigation of CA(s), Site Inspection • and Appraisal of Project(s); • - Loan examination; and • - Mortgage examination;

  19. WHAT ARE THE ROLES OF THE PARTNER-LGU? • SHFC shall train the LGU Housing Unit personnel in the conduct of the forgoing activities. To ensure the capability build-up, the LGU shall be assisted by SHFC in the processing of the first two (2) projects. • Puts up an equity for the total project cost as counterpart contribution, equivalent to twenty-five percent (25%) for 1st to 4th class cities or ten percent (10%) of the project cost for 5th and 6th class cities and municipalities of the project cost which can be in the form of any of the ff: - land owned by the partner-LGU to serve as site of the project; - cash financing to pay-off the lot price(privately owned land); - site development.

  20. WHAT ARE THE ROLES OF THE PARTNER-LGU? • Issues a certification from the Local Housing Board (LHB) of the partner-LGU that the project has been processed in accordance with SHFC Community Mortgage Program (CMP) guidelines and puts up a refundable cash deposit to SHFC equivalent to six (6) months amortization of the CA loan as a performance warranty to cover the projects enrolled under the OCL to be paid prior to issuance of LOG; • Assists SHFC in its post take-out collection of monthly amortizations which will include among others, the ff. activities: • - distribution of billing/demand letters; • - resolution of conflicts within the CA; and • - facilitation of ejectment cases against delinquent • member-beneficiaries

  21. WHAT ARE THE ROLES OF THE PARTNER-LGU? • Assists the CAs in the individualization of community loan and titles consistent with the existing SHFC CMP guidelines; and • Assists the CA in finding a substitute MB from the tagging and census list who shall assume the obligation of the defaulting MB.

  22. WHAT ARE THE ROLES OF THE SHFC? • To ensure the viability of the project, SHFC shall conduct a background investigation with regard to the occupancy of the Member-Beneficiaries (MB). It shall also validate the LGU appraisal of the project. Both activities shall be made prior to accreditation and granting of OCL to the prospective Partner-LGU; • Upon accreditation, SHFC shall grant the qualified Partner-LGU an OCL not exceeding Fifty Million pesos (P50,000,000.00) based on the partner-LGU’s identified priority urban poor community / social housing projects; • SHFC shall subsequently conduct trainings, orientations and seminars for qualified partner-LGUs on the roles, duties and responsibilities pertaining to the implementation of LCMP;

  23. WHAT ARE THE ROLES OF THE SHFC? • SHFC shall issue the Letter of Guaranty (LOG) in favor of the landowner upon submission of a certification from the Local Housing Board (LHB) of the partner-LGU that the project has been processed in accordance with SHFC Community Mortgage Program (CMP) guidelines and payment of performance warranty by the partner-LGU ; • SHFC shall release to the landowner the amount equivalent to seventy-five percent (75%) for 1st to 4th class cities or ninety percent (90%) for 5th or 6th class cities and municipalities of the project cost within thirty (30) days from the partner-LGUs’ submission of warranty on the project signed by the municipal/city mayor together with the complete documentary requirements as provided for under the new CMP revised guidelines and a review of the submitted Transfer Certificate of Title (TCT) in the name of the HOA with the corresponding annotation of REM in favor of SHFC;

  24. WHAT ARE THE ROLES OF THE SHFC? • Within one hundred twenty (120) working days from the release of the take-out proceeds, SHFC shall conduct a post audit of the project and its loan documents submitted by the partner-LGU to validate and determine its compliance with CMP loan guidelines; and • SHFC shall refund to the partner-LGU the performance warranty deposit submitted after issuance of post-audit clearances.

  25. PROCESS FLOW Identify the LCMP Projects Accredits CMP Mobilizer/s Landowner (private or LGU) Community Association Partner-LGU (Process Loan and Mortgage Documents) Pays Landowner Amortize Loan Assist CA Delivers documents Submits complete loan documentation Collecting Bank (LBP) or to SHFC Social Housing Finance Corp. (SHFC) CMP Mobilizer/s (NGO, PO, GA or KSA)

  26. WHAT ARE THE LGU BENEFITS FROM THE LCMP? • Early turn-around of LGU funded housing projects • The LGU shall be entitled to 1/6 of actual amount of interest collected from the CA monthly loan amortization as incentive for collection services rendered if Collection Efficiency Rating (CER) of the project reaches 90-100% rating, provided further that they have assisted SHFC in its collection campaign. The 1/6 interest incentive shall however be released only after the issuance of post-audit clearances from SHFC.

  27. SAMPLE COMPUTATION • 1/6 of interest collected from the CAs monthly amortization (accumulated during the term of the loan) Php 50million = Php 7.4million

  28. WHAT ARE THE DOCUMENTARY REQUIREMENTS IN THE ACCREDITATION OF AN LGU IN THE LCMP? • Pro-forma Application Form; • Updated inventory of local housing backlog; • Municipal/City Council Resolution for the creation of a Local Housing Board (LHB) with equitable multi sectoral representation and must have a NGO/PO representative involved in housing and urban development; • Municipal/City Council approved organizational structure and personnel complement of the unit/department in-charge of socialized housing or other housing programs;

  29. Municipal/City Council Resolution authorizing the Local Chief Executive to make a refundable cash deposit equivalent to six (6) months amortization of CA loan in favor of SHFC as performance warranty for the project (s) to be enrolled under the OCL as well as authorizing the said Local Chief Executive to sign, negotiate and transact with SHFC and other LCMP partners to fully operationalize and implement LCMP in the locality; • Municipal/City Council Resolution specifying the list of priority projects together with its respective funding allocations; • Project Profile of projects to be enrolled including: - Appraisal Report; - Masterlist of Beneficiaries • Municipal/City approved Ordinance indicating the procedure and criteria for accreditation of CMP Mobilizers.

  30. If available, the following documents shall also be submitted: • An updated Comprehensive Land Use Plan (CLUP) and Comprehensive Shelter Plan (CSP) approved by their respective LHB; • Municipal/City Council ratified Annual Investment Plan (AIP) indicating the prioritized LCMP project/s for the year and the approved regular budget allocation for housing; and • Commission on Audit (COA) Audited Financial Statements for the past three (3) years.

  31. ACCREDITED LGUs Island Garden City of Samal 11. La Paz, Tarlac Naga City 12. Mati City Talisay City, Cebu 13. Kidapawan City Lucena City, Quezon 14. Silay City Talavera, Nueva Ecija 15. Calamba City Davao City Malolos City, Bulacan Pagbilao, Quezon Puerto Princesa City Tarlac City

  32. CONTACT US SHFC Corporate Office: 6F BDO Plaza, Paseo de Roxas Avenue, Makati City Tel. no. (02) 7506337 loc. 821 http://www.shfcph.com

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