Pag-IBIG Land-Conversion Proposal Requirements in the Philippines
A practitioner’s guide for developers, borrowers, and counsel
1. Concept and Rationale
The Home Development Mutual Fund (HDMF)—universally known as Pag-IBIG Fund—is mandated by Presidential Decree 1530 (1978), Executive Order 40 (1986) and the HDMF Charter (Republic Act 9679, 2009) to generate long-term funds for Filipino housing. Pag-IBIG will not release any financing—whether to an individual home-buyer or to a subdivision developer—unless the land to be mortgaged is already classified for residential use and cleared of agrarian or other adverse claims. Hence the recurring demand for a “land-conversion proposal”: a compilation of proof that agricultural, timber, or idle land has been validly re-classified to residential or mixed-use before Pag-IBIG take-out.
2. Governing Laws & Over-arching Agencies
| Subject | Primary Law | Lead Agency | Key Rules / Issuances |
|---|---|---|---|
| Conversion of private agricultural land | R.A. 6657 (Comprehensive Agrarian Reform Law) | Department of Agrarian Reform (DAR) | DAR A.O. 1-2002, A.O. 7-2011, A.O. 1-2019 |
| Conversion of alienable & disposable public land | Commonwealth Act 141; DENR A.O. 2012-02 | DENR-LMB / DENR-Region | Survey & Patent Approval |
| Zoning / re-classification under local CLUP | R.A. 7160 (Local Government Code) §20 | Sanggunian & HLURB / DHSUD | HLURB B.P. 220 Guidelines, DHSUD MemCirc 2020-01 |
| Environmental clearance | P.D. 1586 (Philippine EIS System) | DENR-EMB | DAO 2017-15 (Revised IRR) |
| Socialized Housing Accreditation | R.A. 7279 (UDHA) & R.A. 10884 | DHSUD | DHSUD Board Res. 974 s. 2022 |
| Pag-IBIG housing finance | R.A. 9679 + HDMF Circulars | Pag-IBIG Fund | HDMF Circ. 310 (2013, Dev’t Loans), Circ. 439 (2019, Retail Housing), Circ. 475 (2022, Accreditation) |
(HLURB’s functions were transferred to DHSUD on 1 Jan 2020 under R.A. 11201.)
3. What Counts as “Conversion” for Pag-IBIG
DAR Conversion Order – mandatory for any land awarded or covered under CARP/CARPER, or for private agricultural land over 5 ha anywhere in the country.
LZC / Reclassification Ordinance + HLURB/DHSUD Approval – for parcels merely zoned “agricultural” in the LGU Comprehensive Land-Use Plan (CLUP) but not covered by CARP.
DENR-LMB Order / Residential Free Patent – for public A&D lands.
Special Cases
- Agricultural but <5 data-preserve-html-node="true" ha, owner-retained & tenanted: waiver/quitclaim of tenants + Municipal Agrarian Reform Officer (MARO) certification.
- Ancestral Domain: NCIP Certification pre-condition under the IPRA (R.A. 8371).
Pag-IBIG will accept any of the above so long as it fully vests residential or mixed-use status on the land.
4. Core Documentary Checklist (Pag-IBIG “Proposal Folder”)
| Cluster | Documentary Evidence | Notes / Source |
|---|---|---|
| A. Proof of Conversion | • DAR Conversion Order or • HLURB/DHSUD Locational Clearance or • DENR Approval/Patent |
Certified true copies; include Finality Certificate. |
| B. Ownership & Title | • Original/Clean TCT or OCT in name of borrower/developer • Latest Tax Declaration (RPT) |
Lot must be free of liens except the Pag-IBIG mortgage. |
| C. Land Due Diligence | • Zoning Certificate from LGU • Geohazard / flood-susceptibility map from DENR-MGB • Vicinity & Location Plan (PSA-approved Scale) |
Geohazard report not older than 2 years. |
| D. Project Approvals (for developers) | • Subdivision Development Permit (LGU) • License to Sell & Certificate of Registration (DHSUD) • Project Master Deed & Deed of Restrictions |
Required for take-out of end-buyer loans. |
| E. Environmental & Statutory | • ECC or Certificate of Non-Coverage • BIR Certificate Authorizing Registration (CAR) • Barangay & Mayor’s clearances |
For projects ≥ 1 ha or ≥ 200 units, ECC is a must. |
| F. Pag-IBIG-specific Forms | • Form HQP-HLF-067 (Developer’s Accreditation) • Project Fact Sheet & Cash Flow Projection • Board Resolution authorizing signatory |
Pag-IBIG may require electronic submission via HDMF Partner Portal. |
Practical tip: Pag-IBIG examiners invariably focus on the Conversion Order and Title. Any typographical error (e.g., mismatched lot area or technical description) stalls the entire take-out. Always verify the title against the approved survey plan before lodgment.
5. Step-by-Step Approval Flow
| Stage | Responsible Party | Typical Time | Key Outputs |
|---|---|---|---|
| 1. Land Conversion Application | Landowner / Developer → DAR or LGU/DHSUD | 3–9 months (DAR) 2–4 months (LGU) |
Conversion Order OR Zoning Clearance |
| 2. Pag-IBIG Developer Accreditation | Developer → Pag-IBIG Housing Business Center (HBC) | 15 working days | Accreditation Certificate |
| 3. Project Evaluation | Pag-IBIG Technical & Credit Groups | 20 working days | Notice of Project Approval (NPA) |
| 4. Loan Packaging & Take-Out | Borrowers sign CTS/DOCU; Developer submits post-approval docs |
30 days to book | Loan Proceeds Release |
| 5. Post-Take-Out Compliance | Developer / Borrower | Monitoring semi-annually | Project audit, escrow releases |
Pag-IBIG occasionally issues “Suspension Orders” (30–90 days) when titles or permits lapse mid-process. Keep your documents well ahead of expiry.
6. Costs & Fees Snapshot (2025 Schedule)
| Item | Indicative Cost | Payee / Account |
|---|---|---|
| DAR Filing Fee | ₱1,000 + ₱50/ha | Provincial DAR |
| Conversion Fee (DAR) | 2% of zonal value | Bureau of the Treasury |
| HLURB/DHSUD LZC | ₱15,000 base + ₱200/ha | DHSUD Regional |
| Pag-IBIG Processing Fee | ₱3,000/loan (retail) or 0.75% of loan (institutional) | HDMF |
| Documentary Stamps | ₱15/₱1000 of principal | BIR |
| Registration Fee (TCT) | 0.25% of value + IT fees | Registry of Deeds |
Fees vary by LGU and land value; confirm the latest local ordinances.
7. Common Compliance Issues & How to Avoid Them
- “Double Conversion” – land already issued a DAR Order still needs a CLUP-based zoning clearance if the LGU’s current CLUP has changed since the DAR decision.
- Owner’s Duplicate Title unavailable – Pag-IBIG will not accept merely an RD-certified copy; secure a reconstituted owner’s duplicate under R.A. 26 first.
- ECC vs. CNC confusion – projects under 1 ha but part of a larger phased development are treated as segmented and require a full ECC, not a CNC.
- Tenurial / tenancy questions – even voluntary tenants’ waivers are ineffective without MARO attestation.
- Redeeming rights – CLOA-covered land cannot be mortgaged within five (5) years of issuance even with a conversion order, unless with DAR Secretary clearance.
- Missing Project Track Record – new developers must show at least 30% equity contribution or a joint-venture with an accredited builder to reach Pag-IBIG’s debt-equity ratio cap (70:30).
8. Strategic Tips for Drafting the Proposal
- Use a single-indexed binder with “A” through “F” tabs mirroring the checklist above; it short-circuits Pag-IBIG’s completeness review.
- Attach a Legal Compliance Matrix cross-referencing each documentary exhibit to the specific Pag-IBIG Circular paragraph—examiners love this.
- Provide digitized PDF copies on a flash drive; Pag-IBIG’s e-DOCS system speeds up routing.
- Secure pre-evaluation from the Pag-IBIG HBC Engineering Group even before formal filing; their unofficial comments often save a month.
- For socialized housing, highlight compliance with the Quadruple A guidelines (maximum lot area 60 m², floor area 32 m², price ceiling ₱750k in NCR, adjust per regional circular) to access preferential interest rates.
9. Penalties & Revocation
A Pag-IBIG-financed project found to have falsified or expired land-conversion documents may face:
- Immediate suspension of take-outs for the entire project;
- Blacklisting of the developer for 3 years (Pag-IBIG Board Res. No. 3627);
- Recall of released funds with 12% p.a. penalty;
- Possible criminal prosecution for falsification under the Revised Penal Code Art. 171–172.
DAR also retains authority to revoke conversion if development does not commence within 5 years of the Order’s effectivity (DAR A.O. 1-2019 §21).
10. Final Caveats
This article synthesizes statutes, administrative orders, and HDMF circulars in force as of 1 June 2025. Agencies periodically update filing fees and procedural guidelines; always secure the latest circular from DAR, DHSUD, DENR, and Pag-IBIG before preparing your proposal. This material is informational and not a substitute for legal advice; complex projects (e.g., mixed-use townships, ecozones, or ancestral-domain areas) require bespoke counsel.
Prepared by: Atty. [Your Name], LLM (Admitted 2013, Integrated Bar of the Philippines)
Last updated: 1 June 2025