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%
  • Open Housing : 70%
Equity / Downpayment
  • Socialized and Low-Cost Housing : 10%
  • Medium Cost Housing : 20%
  • Open Housing : 30%
Security / Collateral Real Estate Mortgage or Receivables under Contract-to-Sell
Credit Ratio
  • Forty percent (40%) of Net Disposable Income;
  • Thirty percent (30%) of the Gross Verifiable Monthly Income for those with income less than P26,667.00; or
  • Thirty five percent (35%) of the Gross Verifiable Monthly Income for those with monthly income of at least P26,667.00.
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.