CASH FLOW GUARANTEE (CFG) ON ASSET-BACKED SECURITIES

Terms and Conditions

Extent of Guarantee Coverage	The Special Purpose Entity (SPE) shall issue 2 classes of certificates: Senior Notes (70%) and Subordinated Notes (30%). PHILGUARANTEE shall guarantee the receivables backing-up the Senior Notes. Default in the servicing of securities shall not result in a call on the guarantee.*
Subordination	The Subordinated Notes (30%) shall be held by the Originator / Seller of the Receivables.
Guarantee Premium Rate	The premium rate shall be 1.25% of the outstanding Senior Notes, payable annually in advance.
Government Guarantee	Sovereign
Loan-to-Collateral Requirement	Socialized and Low-Cost Housing : 90% Medium Cost Housing : 80%
Equity / Downpayment	Socialized and Low-Cost Housing : 10% Medium Cost Housing : 20%
Security / Collateral	Real Estate Mortgage or Receivables under Contract-to-Sell
Gross Monthly Income Ratio	Forty percent (40%) of the Gross Verifiable Monthly Income for those with income of at least P24,428.00 Thirty percent (30%) of the Gross Verifiable Monthly Income for those income less than P24,428.00
Mortgage Redemption Insurance and Fire Insurance	Required
CMAP / NFIS	Required
Property Location	Developed subdivision or classified as residential, near center of business, commerce and employment; Accessible by transportation; Have direct access to power/water utilities, sewerage and drainage systems; and Must not be located in flood prone, landslide prone and lahar endangered areas
Other Eligibility Criteria for the Receivables	Receivable is not in default and does not have a record of non-payment of more than 60 days within the immediately preceding 12 months; Seasoning of at least 24 months; All supporting documents are duly executed, valid and enforceable; Title of the property is in the name of the Originator/Seller; Housing unit subject is 100% completed and turned over to the homebuyer; and Other criteria as may be agreed upon.
Default	6 months consecutive non-payment of loan amortization
Call on the Guarantee	The SPE may only call on the guarantee upon the occurrence of the Guarantee Trigger Event (GTE) which will happen when the value of the Cumulative Total Defaulted Loans has reached the value of the Subordinated Notes. The call on the guarantee is on a per defaulted residential loan/account basis upon the occurrence of the GTE.

*The 30% subordination rate is not fixed and may depend on the securitization structure and the cash flow of the receivables.