In the Philippines, the Home Development Mutual Fund (HDMF), popularly known as the Pag-IBIG Fund, serves as the primary government financial institution tasked with providing affordable shelter financing. Governed by Republic Act No. 9679 (the Home Development Mutual Fund Law of 2009), the Fund operates as a mutual savings system that leverages member contributions to offer housing loans with competitive interest rates and extended repayment terms.

To successfully navigate a housing loan application, a member must satisfy specific legal and administrative criteria set forth by the Fund.

I. Membership Eligibility Criteria

Not every member is immediately eligible for a housing loan. Under current HDMF guidelines, an applicant must meet the following cumulative requirements:

Active Membership: The applicant must be an active member of the Pag-IBIG Fund.
Contribution Requirement: The member must have at least twenty-four (24) monthly mandated contributions.
Note: A member may opt to pay the "lump sum" equivalent of 24 months in a single payment to meet this requirement, provided they are a new member or have not yet reached the 24-month mark.
Age Limit: The applicant must not be more than sixty-five (65) years old at the time of application and must be no older than seventy (70) years old at the date of loan maturity.
Legal Capacity: The applicant must have the legal capacity to acquire and encumber real property.
Creditworthiness: The applicant must pass the Fund's background and credit check, ensuring they have no outstanding Pag-IBIG housing loans that are in default or foreclosed. If a member has an existing "Multi-Purpose Loan" (MPL), payments must be updated.

II. Eligible Loan Purposes

The Pag-IBIG Housing Loan is not limited solely to buying a house. Legally, the loan proceeds may be utilized for:

Purchase of a fully developed residential lot (not exceeding 1,000 square meters).
Purchase of a residential house and lot, a townhouse, or a condominium unit.
Construction or completion of a residential unit on a lot owned by the borrower.
Home improvement, including alteration, major repair, or expansion of an existing unit.
Refinancing of an existing housing loan with an institution acceptable to the Fund (provided the loan is not in default).

III. Mandatory Documentary Requirements

The application process is divided into two stages: the initial evaluation and the post-approval/take-out process.

A. Basic Requirements for All Applicants

Housing Loan Application (HLA): Duly accomplished and with recent ID photos.
Proof of Income:
For Locally Employed: Notarized Certificate of Employment and Compensation (CEC), latest Income Tax Return (ITR), and latest payslips.
For Self-Employed: ITR, Audited Financial Statements, and Business Permit/Mayor’s Permit.
For OFWs: Employment Contract (authenticated by the Philippine Overseas Labor Office or POLO) and proof of remittance.
Valid IDs: Photocopies of two (2) valid government-issued IDs.

B. Technical Requirements (Property Related)

Transfer Certificate of Title (TCT): A certified true copy of the title from the Registry of Deeds.
Tax Declaration: Latest declarations for both the Land and the Improvement/Building.
Tax Clearance: Proof that real property taxes are paid up to date.
Vicinity Map: A sketch of the property's location for appraisal purposes.

IV. Loan Amount and Interest Rates

The maximum loanable amount is PHP 6,000,000.00, subject to the lowest of the following:

The member's actual need.
The desired loan amount.
The Loan-to-Appraisal Value Ratio (the Fund typically finances up to 90-95% of the appraised value).
The member's Capacity to Pay (monthly amortization should generally not exceed 35% of the borrower's gross monthly income).

V. Collateral and Security

The primary security for the loan is a First Real Estate Mortgage (REM) on the property being financed. The title must be free from any liens and encumbrances except those imposed by law or the Fund itself.

Furthermore, the borrower is required to maintain:

Mortgage Redemption Insurance (MRI): To cover the outstanding debt in the event of the borrower's death or total disability.
Fire Insurance: To protect the property against fire and other allied perils.

VI. Co-Borrowers and Special Programs

The Fund allows "joint" applications. Up to three (3) qualified members (typically relatives within the second degree of consanguinity or affinity) may consolidate their incomes to qualify for a higher loan amount, provided they are all co-owners of the property and jointly and severally liable for the debt.

For low-income earners, the Affordable Housing Program (AHP) offers subsidized interest rates for those whose gross monthly income falls below a certain threshold (currently PHP 15,000 for NCR and PHP 12,000 for other regions), allowing for even more accessible monthly payments.