social housing finance corporation

SPECIAL REPORT: SHFC cuts down socialized housing loan interest from 6 percent to 2 percent

The government agency tasked with funding housing for the country’s homeless families has cut down interest on socialized housing loans from 6 percent to 2 percent.

shfc 16th anniversaryNEW SCHEMES. Secretary Eduardo del Rosario (3rd from left) of the Department of Human Settlements and Urban Development (DHSUD), presents the Social Housing Finance Corp.’s (SHFC) 12 new modalities, new interest rates, a condonation program, and its achievements in a press conference in line with the agency’s 16th anniversary held at the Valero Grand Suite in Makati City on Friday (Jan. 24, 2020). The SHFC is mandated to undertake socialized housing for low-income earners that will help poor families realize their dreams of owning a home. Also in photo are SHFC president Arnolfo Ricardo Cabling (3rd from right), SHFC executive vice president Junefe Payot (2nd from left), and other officials. (PNA photo by Gil Calinga)

Secretary Eduardo del Rosario, chief of the newly-created Department of Human Settlements and Urban Development (DHSUD), and Atty. Arnolfo Ricardo Cabling, president of the Social Housing Finance Corporation (SHFC), bared the bonanza for the country’s homeless during  the 16th SHFC Founding Anniversary celebration held on January 24, 2020 in Makati City.

shfc logo 2The new reduced interest rates, approved by the SHFC Board of Directors last year, covers loan applications for socialized housing starting January 2022. 

Under the new scheme, borrowers with low income — households  within the two lowest income decile (bracket), including those below the poverty threshold based on latest results of the Family Income and Expenditure Survey — will pay interest rate of only 2 percent from the previous 6 percent. Moreover, the repayment term under the new scheme has been extended from 25 years to 35 years.

To benefit from the reduced interest, borrowers must avail of the SHFC’s full package scheme consisting of a loan for lot acquisition, site development and house construction under its Community Mortgage Program (CMP). Duly organized and registered homeowners associations and community associations shall serve as conduit of the housing loans.

The reduced interest rates will also benefit borrowers above low-income earners. Families in the 3rd decile will now pay interest of 4%, while those in the 4th to 7th decile will pay 4.5%. Families in the 8th to 10th decile or those with highest paying capacity, will continue to be charged the 6% interest, but with repayment terms extended to 30 years.

In his speech at the Founding Anniversary’s Ulat sa Pamayanan (Report to the People), del Rosario said the CMP’s reduced interest rate of 2 percent is the lowest ever in the history of housinf finance in the country.

CMP, the SHFC flagship program, has already benefited over 350,000 borrowers through over P16 Billion in loan assistance for socialized housing. In 2019 alone, about P2.8 Billion was extended to 32,797 beneficiaries. The figure is a record -high performance for CMP, twice that of the previous year and thrice that in 2017.

SHFC records show that  80% of the beneficiaries  are Informal Settler Families (ISF) displaced from shorelines, rivers and other risk areas, indicating that the biggest beneficiary of the housing program of the administration of President Rodrigo Duterte are the poorest of the homeless Filipinos.



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