The country’s biggest real-estate association is continuing its push for the creation of a bill that will allow the use of other fund sources for housing to address the country’s housing backlog, estimated at 5.5 million units.
Chamber of Real Estate and Builders’ Association (Creba) Chairman Charlie A.V. Gorayeb told reporters that aggregating existing funds for housing, through a securitization mechanism, is central to addressing the housing needs of low-income earners. The association previously pegged the backlog in housing for the marginalized at 5.5 million units.
In the past, the group incorporated the financial component of its advocacy with the creation of the Department of Housing and Urban Development, a measure that has failed to gain approval in Congress time and again. Gorayeb said, with a separate bill
identifying new sources of housing funds, the measure would have better chances of being approved.
Specifically, the bill will amend the Comprehensive and Integrated Shelter Finance Act of 1994 to insert other sources of funding, such as the annual investments bonds, worth P35 billion, of the Social Security System; P25 billion, from the Government Service Insurance System; and P70 billion, from the Pag-IBIG Fund—all mandated by the agencies’ corporate charters. Another P100 billion would be sourced from unused “Agri-Agra funds” of local banks. The funds cited are covered by their respective mandates to be used for localized and socialized housing, although enforcement has been lacking, Gorayeb said.
Part of the amendments proposed by the bill is the creation of the Centralized Homebuyer Financing Program, under which the securitization mechanism will be carried out.
The program provides that the total P230 billion would be under the control of a secondary mortgage institution (SMI), which would control the mortgage-backed securitization program.
Under the proposal of Creba, the government-organized SMI would offer two housing packages for homebuyers.
Creba recommended that funding for socialized housing, which covers residential subdivision units and residential medium-rise building (MRB) units below P1.25 million, shall be lent out at a fixed interest rate of 4.5 percent, good for 25 years.
Funding for economic housing, on the other hand, covering subdivisions and MRB’s sold above P1.25 million but not more than P3.199 million, shall be lent out at 6.5-percent interest rate for the same period. Gorayeb said he has been in talks with House Committee on Housing Chairman Negros Occidental Rep. Alfredo “Albee” Benitez for the sponsorship of the bill. But he said the details have to be finalized.