Pag-lBIG Fund Corporate Headquarters Petron MegaPlaza Bldg.,

358 Sen. Gil Puyat Avenue Makati City

Circular No. 428

TO : ALL CONCERNED

SUBJECT: OMNIBUS GUIDELINES ON THE SALE OF Pag-lBIG FUND REAL AND OTHER PROPERTIES ACQUIRED

Pursuant to the approval by the Senior Management Committee, the Omnibus Guidelines on the Sale of Pag-lBIG Fund Real and Other Properties Acquired is hereby issued:

I. OBJECTIVES

The program aims to achieve the following objectives:

1. To properly identify which among the acquired assets of the Fund may be disposed of;

2. To immediately dispose of non-performing assets at the highest value possible through various modes of disposal; and

3. To assist highly delinquent borrowers to maintain their possession or use of the property under modified terms and conditions.

II. COVERAGE

This Guidelines shall cover all real estate J;>roperties acquired by the Fund by virtue of:

1. Cancellation of Contract-to-Sell/Deed of Conditional Sale (CTS/DCS),

2. Voluntary surrender of property that is subject of CTS/DCS,

3. Dacion en Pago,

4. Foreclosure of Real Estate Mortgage (REM),

5. Absolute Deed of Assignment; and

6. Other Modes of Acquisition.

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Ill. GENERAL CONDITIONS

1. All real estate properties acquired by the Fund and endorsed for disposal may be disposed under this program.

2. Disposal of the Fund's acquired assets shall be on an "as is, where is" basis, which means that the buyer accepts the physical condition of the subject property including whether it is occupied or not.

3. The acquired properties available for sale shall be posted immediately in conspicuous places within or near the location of the subject property and in the Pag-lBIG Fund premises. It shall likewise be published in the Fund's website.

4. The appraised value of the acquired asset must not be more than two (2) years as of date of disposal.

IV. DIRECT PURCHASE FOR OCCUPIED UNITS

1. Direct Purchase shall refer to the purchase of the acquired assets by the present occupant.

2. The Fund shall issue an Invitation to Purchase (ITP) to the present occupant offering him/her the option to purchase outright the acquired asset or to lease the property with option to purchase later.

3. The present occupant shall submit an Offer to Purchase (OTP) indicating his chosen mode of payment, and pay the non-refundable reservation fee. Said reservation fee shall be forfeited in favor of the Fund in case the buyer did not pursue the sale transaction, or his application is denied for reasons attributable to him. The OTP shall be valid for a period of thirty (30) calendar days.

4. The selling price of the subject acquired asset shall be based on its latest appraised value.

5. No discount shall be granted under direct purchase.

6. Once an offer has been made, the buyer must comply with the terms and conditions of the chosen mode of payment under Item Vl.1 of this Guidelines within the prescribed period from payment of the reservation fee.

7. If the occupant fails to submit an OTP within the prescribed period from receipt of the Invitation to Purchase, Pag-lBIG Fund may initiate the eviction proceedings.

V. MODES OF DISPOSAL OF ACQUIRED ASSETS

Any unsold properties via direct purchase, or unoccupied units shall be disposed based on the following order of disposal of Pag-lBIG Fund acquired assets.

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However, buyer-initiated bulk sale/group sale may be accepted without going through public auction; provided that, the properties subject of the offer are presented to and approved by the Senior Management Committee. The Fund shall publish an invitation for bulk sale/group sale for the units subject of the offer.

1. PUBLIC AUCTION

1.1 First (1 st) Public Auction

1.1.1 1st Public Auction refers to the sale of acquired assets through the submission of sealed bids by prospective buyers, whereby the time, date and place of opening of bids is indicated in the Invitation to Bid (1TB).

1.1.2 The 1TB shall be published at least once in a newspaper of general circulation with the list of available acquired assets for sale continuously posted in the Pag-lBIG Fund website. A Notice of Sale and the list of available acquired assets for sale shall be posted in conspicuous places in the locality where the properties are located as well as in the Pag-lBIG Fund premises.

1.1.3 The minimum bid amount shall not fall below the latest appraised value of the subject property. There must be at least one (1) bid that meets the minimum auction requirements. Otherwise, a failure of auction shall be declared for that particular property.

1.1.4 The bidder shall state in words and in figures the amount of his bid and his mode of payment and shall submit a bidder's bond in the amount equivalent to five percent (5%) of his bid. The bond shall be in Philippine Currency and may be in the form of cash or manager's check payable to the Fund and issued by any commercial or universal bank. The bidder may pay the balance through cash or installment as provided under Item Vl.1. In the absence of a chosen mode of payment, the default mode of payment shall be long-term installment.

1.1.5 The bid must be submitted in a sealed envelope addressed to the Pag-lBIG Fund Acquired Asset Disposal Committee of the Hub/Business Center maintaining the acquired asset, before the cut-off time on the scheduled date of bidding. Opening of bids shall take place on the scheduled date and time immediately thereafter.

1.1.6 The qualified bidder who offers the highest bid shall be declared the winner. The decision on the bid shall be final and binding.

The bond paid by the non-winning bidders shall be returned to them immediately once a winning bidder has been declared.

1.1.7 In case there are identical offers constituting the highest bids, the tie shall be resolved by considering the Mode of Payment. The priority in terms of mode of payment shall be as follows:

1.1.7.1 Cash 1.1.7.2 Short-Term Installment 1.1.7.3 Long Term Installment

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If there is still a tie after considering the mode of payment, it shall be resolved immediately through toss coin. However, in case there are more than two (2) highest bidders, the tie shall be resolved through draw lots.

1.1.8 In case the sale to the winning bidder is cancelled, the Fund shall offer the property to the next highest bidder. In the event of a tie, the rule on resolving ties in the preceding paragraph shall be applied. The new winning bidder shall be required to pay a down payment of 5% of the offer price within 15 calendar days from notice and the remaining ninety-five percent (95%) of his bid price within the approved payment period.

1.1.9 No discount shall be given to the winning bidder, regardless of chosen mode of payment.

1.2 Second (2nd) Public Auction

1.2.1 Second (2nd) Public Auction is the sale of Pag-lBIG Fund acquired assets that remain unsold during the 1st Public Auction, which shall be governed by the same rules under Item V.1.1.

1.2.2 The minimum bid amount shall be the appraised value of the subject property less 10% discount.

1.2.3 In the absence of a preferred mode of payment as mentioned in Item Vl.1, the default mode of payment is through long-term installment. In case the winning bidder opted to pay through cash or short-term installment, the applicable additional discount based on the winning bid amount are as follows:

Mode of Payment Discount Rate Cash 20% Short-Term Installment 10% Long-Term Installment None

2. NEGOTIATED SALE

All unsold properties during the Second (2nd) Public Auction shall be offered through negotiated sale. Pag-lBIG Fund shall post the list of properties and shall accept offers to purchase within the prescribed period. Interested buyers shall submit offers to purchase in a sealed envelope indicating the mode of disposal under negotiated sale, their offer price and chosen mode of payment. Pag-lBIG Fund shall determine the winning offer based on Item V.2.5 hereof. The mode of disposal under negotiated sale shall be as follows:

2.1 Group Sale

2.1.1 The Group Sale of Pag-lBIG Fund acquired assets shall be available to employed Pag-lBIG Fund members whose employers meet the following requirements:

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2.1.1.1 Accredited pursuant to the criteria provided in the prevailing guidelines on the Pag-lBIG Fund Employer Accreditation Program; and

2.1.1.2 Have a Collection Servicing Agreement (CSA) or will have a CSA with the Fund relative to the deduction and remittance of housing amortizations.

The Group Sale shall also be open to members of employees' associations or cooperatives whose employer has a CSA or willing to execute a CSA with the Fund.

2.1.2 Buyers under group sale shall submit their Offer to Purchase (OTP) to the Fund in a sealed envelope within the prescribed period, stating his chosen mode of payment and offer price.

2.1.3 The minimum offer or gross selling price should not fall below the aggregate appraised value of the properties offered for group sale.

2.1.4 The evaluation of the offer shall be on a per property basis, even if the disposal is denominated as Group Sale. When there are competing offers on the same property, the highest offer on a specific property shall be considered the winner.

In case there are identical offers constituting the highest offer on a specific property, the tie shall be resolved by toss coin. However, in case there are more than two (2) highest offerors, the tie shall be resolved through draw lots.

2.1.5 Winning buyers shall be required to attend the briefing on the Group Sale of Pag-lBIG Fund ROPA.

2.1.6 The aggregate gross selling price, which is based on the appraised value of the properties subject of the Group Sale, shall be at least Ten Million Pesos (P10,000,000.00).

2.1. 7 Regardless of the mode of payment, the Fund shall grant a discount depending on the gross selling price of the subject properties:

Gross Selling Price Discount Rate P 10 M to P50M 40% More than P50M to P1 QOM 42% More than P1 QOM 45%

In case the group has subsequent set of buyers for the same calendar year, the applicable discount shall be based on the cumulative gross selling price of all the properties bought in the same year under the first successful offer and the subsequent one/s. Said discount shall likewise be applicable to previously taken out accounts, or to the properties bought under the first successful offer. Any excess payment upon the application of the said discount shall be considered as principal payment to the buyer's housing obligation.

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2.1.8 The individual buyer in the group may purchase the acquired asset through any mode of payment provided under Item Vl.1 of this Guidelines.

2.1.9 In the event the individual buyer opts to purchase the acquired asset through long-term installment, the following conditions must also be complied with:

2.1.9.1 The selling price shall be paid in equal monthly installments through salary deduction or post-dated checks (PDCs) throughout the approved term. The monthly installment shall commence a month after the signing of the Deed of Conditional Sale (DCS), and every month thereafter until full settlement of the obligation.

2.1.9.2 The amount equivalent to three (3) months housing installment or the amount equivalent to the outstanding obligation, whichever is lower, shall be deducted from the retirement benefits upon retirement or from the total compensation due to the employee upon his/her separation. Said deducted amount shall be credited as advance or full payment, as the case may be, on the buyer's outstanding obligation with the Pag-lBIG Fund.

2.1.9.3 In case of resignation, retirement or other modes of separation from employment, the buyer may opt to pay the outstanding obligation through any of the following modes:

2.2 Bulk Sale

a. Salary Deduction with New Employer; b. PDCs; c. Accredited Collection Partners; d. Auto-debit arrangement with banks; or e. Any other collection system which the Fund may

implement in the future.

2.2.1 An interested buyer may offer to purchase more than one (1) acquired asset with aggregate appraised value of at least Ten Million Pesos (P10,000,000.00).

2.2.2 The buyer shall submit his Offer to Purchase (OTP) to the Fund in a sealed envelope within the prescribed period, stating his chosen mode of payment and offer price.

2.2.3 The minimum offer or gross selling price should not fall below the aggregate appraised value of the properties being offered for bulk sale.

2.2.4 In case of multiple offers for the same set of properties, the winning offer shall be the highest offer, and in case of a tie, the winning offer shall be determined in accordance with Item V.2.5.

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2.2.5 The Fund shall grant a discount depending on the gross selling price:

Gross Selling Price Discount Rate

P 10M to P50M 40%

More than P50M up to P100M 42%

More than P1 00M 45%

2.2.6 The buyer shall pay a cash bond for the bulk transaction which is equivalent to Five Thousand (P5,000.00) for every ROPA comprising the bulk sale upon the execution of the Deed of Conditional Sale.

Said cash bond shall be refunded to the buyer upon full payment of the aggregate net selling price within the prescribed period. Otherwise, it shall be applied as partial payment to the purchase price.

2.2.7 The payment of the net selling price shall be made in monthly or quarterly payments, or in such payment terms as may be acceptable to the Fund.

2.2.8 The Fund shall allow the partial release of titles of properties comprising a bulk transaction upon payment of the downpayment; provided, the downpayment is equivalent to or more than the corresponding net selling price of the property/ies to be released. Subsequent release of titles of properties shall be allowed after every installment payment made by the buyer; provided, the aggregate unapplied principal payment is equivalent to the net selling price of the titles of properties to be released.

2.2.9 In case of default, the buyer has the option to make further payments to complete the equivalent net selling price of at least one (1) or more of the remaining properties with unreleased titles subject of the bulk sale. Otherwise, the paid principal portion of the net selling price shall be forfeited in favor of the Fund upon the effectivity of the cancellation of sale.

2.3 MEMORANDUM OF AGREEMENT WITH PROJECT PROPONENT (MOAPP}

2.3.1 The MOAPP shall be open to any of the following who intend to enter into an agreement with the Fund for the rehabilitation/improvement and sale of the Fund's acquired assets:

2.3.1.1 2.3.1.2 2.3.1.3 2.3.1.4 2.3.1.5

Developers, Contractors, Employers, Local Government Units, and Individuals.

For Local Government Units (LGUs), it must have a Local Housing Board/Office or its equivalent prior to its application for this program and the Developer of the LGU's housing project must be an accredited developer of the Fund.

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2.3.2 The project proponent must meet the following criteria to qualify for the program:

2.3.2.1 Has legal personality to enter into contract;

2.3.2.2 Has no pending Cease and Desist Order, if applicable;

2.3.2.3 Compliant with nationality and ownership requirements under the Constitution and other applicable laws and issuances; and

2.3.2.4 Has sufficient funding to finance the improvements of the ROPA for two (2) cycles of scheduled deliveries, as evidenced by any of the following:

a. Cash deposits; b. Bank Guaranty/ Stand-by Letter of Credit; c. Bank Credit Line; or d. Agreement with Suppliers and/or Contractors.

2.3.3 Acquired assets shall be evaluated for MOAPP arrangement based on the project proponent's capacity to rehabilitate/improve and sell the Fund's acquired assets.

2.3.4 For a proposal to be acceptable to the Fund, the recoverable amount for each lot shall be equivalent to at least the appraised value of the subject properties at the time of execution of the MOAPP, net of the applicable discount.

2.3.5 Properties that were covered by the MOAPP agreement shall be subject to a separate publication.

2.3.6 The rate of discount for the MOAPP arrangement shall be as follows:

Aggregate Appraised Value Discount of the Subject Properties

P10 M upto P50 M 20% More than P50M up to P150 M 22% More than P150 M 25%

2.3.7 Eligible project proponents shall be required to enter into a Memorandum of Agreement (MOA) with Pag-lBIG Fund.

2.3.8 The application of prospective buyer of a property subject of MOAPP shall be subject to advance evaluation on the buyer's eligibility and inspection of completed model units by the Pag-lBIG Fund. The project proponent shall only submit to Pag-lBIG Fund the buyer's completed Buyer's Information Sheet, income documents, and proof of payment of the filing fee.

The Credit Investigation Report (CIR) and Buyer Validation Sheet (BVS) shall be issued to the project proponent if the buyer meets the Pag-lBIG Fund's eligibility criteria. The CIR, BVS, and the receipt of the standard feels must be submitted to Pag-lBIG Fund when filing the buyer's application. The CIR and BVS shall be valid for six (6) months from the issuance of the same by the Pag-lBIG Fund.

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2.3.9 The accounts under the MOAPP shall be taken out only after inspection of the completed units.

2.3.10 Role of Pag-lBIG Fund

2.3.10.1 The Fund shall identify and pool acquired assets to be offered for MOAPP arrangements.

2.3.10.2 The Fund shall grant the project proponent with the authority to market the acquired assets and to undertake eviction proceedings of occupied properties subject of the MOAPP.

2.3.10.3 The Fund shall pay for the real property taxes of acquired assets until they are sold.

2.3.10.4 The buyers of acquired assets covered by MOAPP arrangements shall not be entitled to discounts provided under this guidelines.

2.3.10.5 The Fund shall process the project proponent's share on the sale of the acquired assets, based on total sales made on or before the 25th of every month, subject to the following conditions:

a. It shall be processed upon the buyer's full payment of the selling price determined by the Fund or upon takeout;

b. The share of the project proponent shall be the actual selling price of the subject acquired asset at the time of disposal to the buyer less the recoverable amount provided under Item V.2.3.4 herein;

2.3.10.6 The Fund, as withholding agent, shall deduct all withholding taxes prescribed by law and other rules and regulations of the Bureau of Internal Revenue.

2.3.11 Role of the Project Proponent

2.3.11.1 The project proponent shall pay a cash bond in the amount of Five Thousand Pesos (P5,000.00) for every Fund's acquired asset covered by the MOAPP. In case of raw land, the project proponent shall pay the cash bond in the amount equivalent to one percent (1 %) of the appraised value of the said acquired asset.

The cash bond corresponding to the acquired assets sold shall likewise be refunded to the project proponent. The cash bond shall be released together with the proponent's share on or before 25th of the month.

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2.3.11.2 The project proponent shall rehabilitate/improve the acquired assets subject of the MOAPP pursuant to a rehabilitation schedule. Hence, the project proponent shall submit to the Fund land development or unit improvement plans, as the case may be, upon the execution of the MOA. Said plans shall be evaluated by the Fund prior to the setting of the selling price.

Should the project proponent be unable to meet the rehabilitation schedule, a letter of notification and request for extension must be submitted to the Fund on or before the last working day of the rehabilitation schedule. Thereafter, the project proponent may be given an extension of at most three (3) months to rehabilitate/improve the acquired assets reckoned from the last day of the rehabilitation schedule. The project proponent shall be required to submit a revised rehabilitation schedule reflecting such extension within thirty (30) calendar days from receipt of the written reply by the Fund. The project proponent may be granted at most two (2) extensions.

2.3.11.3 The project proponent shall market and sell the refurbished units in accordance with a delivery schedule mutually agreed upon by the project proponent and the Fund.

Should the project proponent be unable to meet the delivery schedule, a letter of notification and request for extension must be submitted to the Fund on or before the last working day of the delivery schedule. Thereafter, the project proponent may be given an extension of at most three (3) months to dispose of the acquired assets reckoned from the last day of the delivery schedule. The project proponent shall be required to submit a revised delivery schedule reflecting such extension within thirty (30) calendar days from receipt of the written reply by the Fund. The project proponent may be granted at most two (2) extensions.

The project proponent shall rehabilitate/improve and sell the acquired assets subject of the Agreement for a maximum period of two (2) years from execution of the MOAPP.

2.3.11.4 The project proponent shall take over the administration of the turned-over acquired assets subject of the MOAPP not later than the second week of the month following the signing of the MOAPP. The project proponent shall then be responsible for the security of the said properties.

2.3.11.5 In case of sales through Pag-lBIG Fund's installment sale, the project proponent shall assist buyers for the short-term or long-term installment application and deliver the same to the Fund. However, the signing of the loan documents must be made in the presence of an authorized Pag-lBIG employee and within the Pag-lBIG Fund office.

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2.3.11.6 The project proponent shall refer the buyer to the appropriate operating unit that manages the Fund's acquired assets.

2.3.11.7 The project proponent shall only be allowed to submit a new proposal to manage another inventory of Pag-lBIG Fund acquired assets if at least fifty percent (50%) of the acquired assets subject of the MOAPP have been sold either through cash or installment, subject to the considerations presented herein. The new proposal to manage the same shall still be covered by the existing MOA; provided, the project proponent shall ensure that it shall accomplish the disposal of the rehabilitated/improved Fund's acquired assets. At any given time, the project proponent shall be limited to maintain inventory of properties not to exceed five thousand (5,000) units.

2.3.12 The proponent shall be given a broker's commission in case no rehabilitation was made on the property but the proponent was able to sell the property to the occupant/s or other interested buyer/s.

In such a case, the eligibility requirements for accreditation under the prevailing guidelines on the Broker's Accreditation Program shall be waived.

2.4 Retail Sale

2.4.1 Submission of Offer to Purchase

The buyer shall submit his Offer to Purchase (OTP) to the Fund in a sealed envelope within the prescribed period, stating his chosen mode of payment and offer price. In case the offeror is the winning buyer, he shall be required to pay a non-refundable reservation fee within five (5) working days from the receipt of the Notice of Award. Said reservation fee shall be forfeited in favor of the Fund in case the buyer did not pursue the sale or his application is denied due to reasons attributable to him. Said reservation shall be valid for a period of thirty (30) calendar days.

2.4.2 Discount

Depending on the chosen mode of payment, the following discounts based on the appraised value of the subject acquired asset shall be applicable:

Mode of Payment Discount Rate Cash 30% Short-Term Installment 20% Long-Term Installment 10%

2.4.3 In case the offeror withdraws his OTP or the sale of the acquired asset is cancelled, the second highest offeror as determined in accordance with Item V.2.5 shall be offered the property.

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2.5 Determination of the Winning Offer

2.5.1 The buyer who has the highest gross offer on a specific property shall be considered the winner.

2.5.2 In case there are identical offers constituting the highest gross offer on a specific property, the tie shall be resolved by toss coin. However, in case there are more than two (2) highest offerors, the tie shall be resolved through draw lots.

VI. MECHANICS

1. Modes of Payment

The buyer must abide by the terms and conditions of his chosen mode of payment.

1.1 Cash Payment

1.1.1 The buyer shall be required to pay the reservation fee (except for Bulk Sale and MOAPP) and a downpayment of at least five percent (5%) of the net selling price of the Pag-lBIG Fund acquired asset, as well as sign the Deed of Conditional Sale (DCS).

1.1.2 Full payment of the amount due shall be made within thirty (30) calendar days from the date of signing of the DCS.

1.2 Short-Term Installment

1.2.1 The buyer shall be required to pay reservation fee (except for Bulk Sale and MOAPP) and a downpayment of at least five percent (5%) of the net selling price of the Pag-lBIG Fund acquired asset, as well as sign the DCS.

1.2.2 The amount due shall be payable for more than 30 calendar days up to twelve (12) months from signing of the DCS.

1.2.3 The amount due shall be charged with an interest based on the Full Risk-Based Pricing Framework for three-year fixing period. For Bulk Sale, the applicable interest rate shall be based on the Fund's Full Risk-Based Pricing Framework for Wholesale Loans.

1.2.4 Payment of the selling price shall be made in equal monthly installments throughout the chosen term. The first monthly installment shall commence a month after the execution of the DCS, and every month thereafter until full settlement of the obligation.

1.2.5 The installment payment shall be applied according to the following order of priority:

1.2.5.1 1.2.5.2 1.2.5.3

Penalty; Interest; and Principal.

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1.2.6 Any portion of the amount due that remains unpaid after the due date shall be charged with a penalty of 1/20 of 1 % for every day of delay.

1.3 Long-Term Installment

1.3.1 The long-term installment may be for more than twelve (12) months up to thirty (30) years from signing of the DCS; provided, the said term shall not exceed the difference between age seventy (70) and the present age of the principal buyer. The principal buyer shall be considered 70 years old at the time he has reached his 70th birthday.

1.3.2 Eligibility Requirements

For the purchase of acquired asset through long-term installment, the buyer and his co-buyer/s, if any, must meet the following requirements:

1.3.2.1 Must be a member under the Pag-lBIG I Membership Program as evidenced by the remittance of at least twenty-four (24) monthly savings at the time of application. A member, whose monthly savings are still short of the required number, may be allowed to apply for this program; provided, his total savings upon application is at least equivalent to 24 monthly savings based on the mandatory rate, inclusive of the employee (EE) and the employer (ER) counterparts.

A non-member who wishes to apply for long-term installment may be allowed to do so; provided, he remits the required 24 monthly savings based on the mandatory rate in lump sum, inclusive of the EE and ER counterparts. Said lump sum amount shall be considered a single remittance for the applicable month as of the payment date;

a. Not more than sixty-five (65) years old at the time of application and not more than seventy (70) years old at the end of payment term;

b. Has the legal capacity to acquire and encumber real property;

c. Has passed satisfactory background/credit and employment/business checks of Pag-lBIG Fund; and

d. If with existing Pag-lBIG housing account, either as principal buyer / borrower or co-buyer / co-borrower, it must be updated.

1.3.2.2 Former owners or housing loan borrowers, who intend to acquire properties which they currently occupy, shall no longer be allowed to purchase the acquired assets through long-term installment. However, the Deputy Chief Executive Officer for Home Lending Operations Cluster may allow them to purchase the acquired asset through long-term installment due to certain meritorious reasons.

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1.3.3 Amount Payable in Installment Sale

The amount payable in installment sale shall not exceed Six Million Pesos (P6,000,000.00), which shall be based on the lowest of the following: net selling price of the acquired asset, desired amount of the buyer and his capacity to pay. However, in no case shall the total obligation exceed the amount of P6,000,000.00.

1.3.3.1 All applications for purchase of an acquired asset through long-term installment shall be evaluated based on the buyer's capacity to pay.

1.3.3.2 The amount subject for installment shall be limited to an amount for which the monthly payment shall not exceed thirty-five percent (35%) of the buyer's gross monthly income.

In case the amount based on the capacity to pay results in a monthly payment that is more than 35% of the GMI, the buyer shall be required to pay as equity the difference between the net selling price and the amount based on the capacity to pay.

1.3.3.3 A maximum of three (3) qualified Pag-lBIG members may be tacked into one account subject to the following conditions:

1.3.3.3.1 If the applicant members are related within the second civil degree of consanguinity or affinity:

a. The individual gross monthly income of those tacked into a single account shall be considered in determining their respective capacities to pay; and

b. The co-buyers must likewise pass the eligibility requirements provided in this Guidelines. They shall be jointly and severally liable with the principal buyer for the entire amount payable in installment for the duration of the term.

1.3.3.3.2 If the co-buyers are non-relatives, or are related beyond the second civil degree of consanguinity or affinity, all the buyers shall execute the DCS.

1.3.4 The selling price shall be paid in equal monthly installments throughout the approved term. The monthly installment shall commence a month after the signing of the DCS, and every month thereafter until full settlement of the obligation.

1.3.4.1 The monthly installment may be paid to Pag-lBIG Fund through any of the following modes:

a. Salary Deduction;

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Q) ~ E a> Oen u:::, c--u

b. Post-Dated Checks;

c. Accredited Collection Partners;

d. Auto debit arrangement with banks; or

e. Any other collection system which the Fund may implement in the future.

1.3.4.2 Any portion of the amount due that remains unpaid after the due date shall be charged with a penalty of 1/20 of 1 % for every day of delay.

1.3.4.3 The installment payment shall be applied according to the following order of priority:

a. Penalty; b. Insurance; c. Interest; and d. Principal.

1.3.5 Interest Rate

1.3.5.1 The interest rate to be charged to the net selling price shall be as follows:

Details Gross Monthly Income

Cluster 1 (NCR) Up to P15,000 Up to P17,500 More than P17,500

Cluster 2 Up to P12,000 Up to P14,000 More than P14,000

(Other Regions)

Net Selling Price Up to P450,000 Up to P750,000 More than P750,000 Up

to P6,000,000

Based on the Fund's Full Interest Rate* 3.0% 6.5% Risk-Based Pricing

Framework * Applicable interest rates may change subject to the approval of the Management

1.3.5.2 Buyers earning up to P15,000 for Cluster 1 and up to P12,000 for Cluster 2 with maximum net selling price of up to P450,000 shall be charged with interest rate of 3% for the first 5 years of the term.

1.3.5.3 Buyers earning up to P17,500 for Cluster 1 or up to P14,000 for Cluster 2 with net selling price of up to P750,000 shall be charged with interest rate of 6.5% for the first 10 years of the term.

1.3.5.4 In case the principal buyer's gross monthly income at the end of the five (5) -year or ten (10) - year period is still within the required income threshold under Item Vl.1.3.6.1 herein, the subsidized interest rates shall still apply for an additional three (3) years.

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Eligible principal buyers must submit their request for the extension of the subsidized interest rates within three (3) months prior to the scheduled date of repricing of their long­term installment account.

1.3.5.5 In case the principal buyer failed to apply for the extended application of the subsidized rates within the prescribed period, or if the principal buyer's gross monthly income exceeds the required income threshold, the interest rate shall be repriced based on the prevailing rates in the Fund's Full Risk-Based Pricing (FRBP) Framework.

For buyers opting for a 3-year or 5-year fixing period, the interest rates shall be repriced based on the prevailing rates in the FRBP Framework or an additional two percent (2%) shall be added to the existing interest rate, whichever is lower. Thereafter, said interest rates shall be repriced periodically depending on the chosen fixed pricing period of the buyer. The base rate for the succeeding repricing shall be the interest rate for the immediately preceding repricing period.

1.3.5.6 If the buyer's gross monthly income is more than P14,000 or P17,500 depending on the income cluster, or the net selling price exceeds either P450,000 or P750,000, the interest rate shall be repriced periodically depending on the chosen repricing period of the buyer.

1.3.6 Insurance

1.3.6.1 The principal buyer shall be compulsorily covered by Sales Redemption Insurance (SRI). In case of tacked accounts, each of the buyers shall be covered by SRI to the extent of their corresponding obligation.

1.3.6.2 The principal buyer shall obtain Fire and Allied Perils Insurance (FAPI) on the subject acquired asset equivalent to the appraised value of the housing component of the residential unit or the net selling price, whichever is lower.

2. Prepayment

2.1 The buyer shall be allowed to prepay his obligation in full or in part without prepayment penalty, pursuant to Republic Act No. 7394, otherwise known as "The Consumer Act of the Philippines", but subject however to a service fee as may be fixed by the Fund.

2.2 Accelerated Payments - Any amount in excess of the monthly installment due shall be treated as advance installment and shall be applied on the next due date. However, upon the request of the buyer and provided the amount to be applied is equivalent to at least one monthly installment, said amount shall be applied to the principal.

The preference of the buyer on the treatment of his excess payment must be noted on/properly disclosed in the Pag-lBIG Fund Receipt.

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3. Documentation on the Sale of Pag-lBIG Fund Acquired Assets

3.1 The sale of Pag-lBIG Fund acquired asset to a buyer through cash and installment sale shall be documented using a Deed of Conditional Sale to be executed between the Fund and the buyer.

3.2 A Deed of Absolute Sale shall be issued to the buyer upon full payment of the purchase price. Said buyer shall be responsible for the transfer of the title in his favor and shall shoulder the corresponding transfer costs, and other related expenses.

4. Physical Possession of the Acquired Asset

The buyer shall have physical possession of the acquired asset if the following conditions are met:

4.1 In case of cash payment, the buyer has already paid in full the total amount due;

4.2 In case of short-term installment, the buyer has already paid 5% of the net selling price;

4.3 For long-term installment, the buyer has already paid the incidental expenses; or

4.4 In case of Lease with Option to Purchase, the lessee has already paid one month advance and two months security deposit.

5. Cancellation of Sale and/or Termination of the Memorandum of Agreement

5.1 Cancellation of Sale

5.1.1 The sale of the acquired asset shall be cancelled under the following circumstances:

5.1.1.1 The buyer withdraws his/her offer to purchase after it has been accepted;

5.1.1.2 The buyer fails to pay the required reservation fee and/or downpayment within the prescribed period;

5.1.1.3 If cash payment, the buyer fails to pay the full amount within 30 calendar days;

5.1.1.4 If short-term installment, the buyer fails to pay three (3) monthly installments;

5.1.1.5 The buyer violates or fails to perform any of the obligations in the contract entered into with Pag-lBIG Fund.

5.1.2 A Notice of Cancellation of Sale shall be issued to the buyer. Once the sale is cancelled, the buyer loses his right to purchase the property/ies.

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5.1.3 If the buyer is already occupying the property, he shall be given 30 calendar days from receipt of the Notice of Cancellation of Sale to vacate the property.

5.2 Termination of the Memorandum of Agreement with Project Proponent

5.2.1 The MOAPP shall be terminated for any of the following grounds:

5.2.1.1 Non-compliance with the rehabilitation and/or delivery schedule;

5.2.1.2 Misrepresentation by any person or agent employed by or allowed to transact or do business in behalf of the project proponent;

5.2.1.3 Upon written notice by either party; or

5.2.1.4 Expiration of the term of the MOAPP.

5.2.2 The termination of the Agreement, other than the expiration of the term of the MOAPP, shall take effect after thirty (30) calendar days from the date of receipt of the termination notice by the Fund or the project proponent, as the case may be.

5.2.3 Notwithstanding the termination of MOAPP, any sale through Pag-lBIG Fund's ROPA that is still undergoing the approval process at the time of the termination shall still be subject to the provisions of this guidelines.

5.2.4 If there are still unsold units in the project proponent's inventory upon termination of the MOAPP, the project proponent shall be given ninety (90) calendar days reckoned from the date of termination of the MOA to purchase the remaining units in his inventory, subject to the following conditions:

5.2.4.1 The purchase price of said units shall be based on the appraised value at the time of execution of the MOAPP less applicable discount as provided in Item V.2.3.6 herein.

5.2.4.2 A penalty of 1/20 of 1 % of the amount due for every day of delay shall be charged on the purchase price reckoned from date of termination of the MOAPP up to actual date of settlement; and

5.2.4.3 The corresponding cash bond shall also be applied as partial payment to the purchase price.

5.2.5 In case the project proponent fails to purchase the units within the prescribed period, the following sanctions may be imposed singly or collectively:

5.2.5.1 Offset the amount due against any of the project proponent's receivables from the Fund;

5.2.5.2 Forfeiture of improvements on the remaining units in favor of the Fund; and/or

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5.2.5.3 Suspension from participating in succeeding offers under the Fund's MOAPP Program.

6. Forfeiture of Payments and Deduction of Other Charges upon Cancellation of Sale in Cash Sale and Short-Term Installment Sale

6.1 Once the sale of the acquired asset is cancelled as provided in the immediately preceding section, the following shall be forfeited in favor of the Fund:

6.1.1 Buyer's principal payments, not to exceed 5% of the net selling price;

6.1.2 Accrued interest already paid, in case of installment payment or if there is a change in the mode of payment reckoned from signing of the DCS up to the effectivity of the cancellation of sale; and

6.1.3 Paid penalty charges, if applicable.

6.2 If the retail buyer already occupied the property at the time of cancellation of sale, the following charges shall likewise be deducted from the buyer's payments:

6.2.1 Corresponding applicable rent for the month/s that the property has been occupied by the buyer, reckoned from the date that the buyer pays the 5% of the net selling price up to the time the subject property has been vacated; and

6.2.2 Unpaid bills and expenses necessary to repair any loss or damage to the property attributable to the fault of the buyer.

6.3 Refund of the excess amount, if any, shall only be made once the property has been vacated.

7. Default for Long-Term Installment Sale

7.1 The long-term installment account shall be considered in default in any of the following cases:

7.1.1 Failure to pay three (3) monthly installments;

7.1.2 Failure to pay real property and other applicable taxes; and

7.1.3 Violation of or failure to perform any of the obligations in the contracts entered into with Pag-lBIG Fund.

7.2 In case of multiple housing accounts, a default on any one (1) of the housing accounts shall constitute default on all of the other existing housing accounts.

7.3 Upon default, all the monies that the buyer has paid to Pag-lBIG Fund shall be forfeited and are not subject to refund.

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8. BLACKLISTING OF BUYER

The Fund shall blacklist the buyer/proponent from the availment of the programs on the disposal of Pag-lBIG Fund acquired assets upon the occurrence of the following:

8.1 Cancellation of Sale as provided in Item Vl.5.1 of this guidelines;

8.2 Termination of MOA with Project Proponent;

8.3 Non-compliance with the rehabilitation and/or delivery schedule;

8.4 Misrepresentation by any person or agent employed by or allowed to transact or do business in behalf of the project proponent;

8.5 The developer has an outstanding breach of warranties;

8.6 The buyer has adverse claims against the Fund or any of its trustees, officers, acting in their official capacity; and/or

8. 7 The Fund has adverse claims against the buyer pending before any judicial and quasi-judicial body or any other tribunal or agency.

Blacklisted buyer/proponent/developer may still be allowed to purchase Pag-lBIG Fund acquired assets due to meritorious reasons subject to the approval of the Deputy Chief Executive Officer for Home Lending Operations Cluster.

9. Lease with Option to Purchase

9.1 A Pag-lBIG Fund member, who is the present occupant of the acquired asset but is not yet capable of purchasing the property, may acquire the said property via the lease with option to purchase program.

9.2 An applicant for the Lease with Option to Purchase Program must be an active Pag-lBIG Fund member at the time of application. The following, however, are excluded from participating in the said program:

9.2.1 A former lessee under the Rent-to-Own Program, who did not exercise his option to purchase the property; and

9.2.2 Those with existing Pag-lBIG housing loan.

9.3 Upon approval of the application, the member shall enter into a Contract of Lease with Option to Purchase with the Fund. The term of the lease shall be for a period of three (3) years.

9.4 Upon signing of the Contract of Lease with Option to Purchase, the lessee shall be required to pay one (1) month advance and two (2) months security deposit.

9.5 The security deposit shall not be applied to monthly rentals during the term of the lease. It shall be used to cover unpaid bills as well as the expenses necessary to repair any loss or damage to the property ( except normal wear and tear) attributable to the fault or negligence of the lessee once the Contract of Lease with Option to Purchase expires or after he vacates the property.

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9.6 After deducting the unpaid bills and expenses necessary to repair any loss or damage due to the fault or negligence of the lessee, any remaining amount from his security deposit shall be refunded to him.

9. 7 The monthly rental shall be based on the prevailing rental rate in the area, which shall not be lower than P1 ,000.00.

9.7.1 The monthly rental may be paid in cash or check to any Pag-lBIG Fund Branch or Office, or to any authorized Pag-lBIG collecting agent.

9.7.2 The monthly rental shall commence on the month following the execution of the Contract of Lease with Option to Purchase. The monthly rental shall be paid on the date that coincides with the date of the execution of the said contract.

9.7.3 Should the due date fall on a non-working day in the Pag-lBIG Fund Branch or Office where the Lease with Option to Purchase account is maintained, the monthly rental shall be paid on or before the next working day.

9.7.4 If the lessee fails to pay the monthly rental on or before the due date, the lessee shall be charged a penalty of 1/20 of 1 % of the amount due per day of delay.

9.8 The lessee warrants that:

9.8.1 All information material to the approval of his application for Lease with Option to Purchase Program are true and correct;

9.8.2 He accepts the housing unit on an "as is, where is" basis;

9.8.3 He and his family shall occupy the residential unit and shall not sublease the property to another party;

9.8.4 He shall answer for the cost of repair, renovation and any or all improvements on the property, such as the construction of a perimeter or property fence or the extension of the housing unit, and is not entitled to reimbursement of useful and necessary expenses on the improvement introduced on the property;

9.8.5 He shall not tear down or destroy improvements introduced to the property during the term of the lease, upon being notified to vacate the property;

9.8.6 He shall exercise due diligence in protecting the property from vandalism and willful destruction during the term of the lease;

9.8.7 He shall exercise his option to purchase at any time during the term of his lease; and

9.8.8 He shall comply with the provisions of the Contract of Lease with Option to Purchase and abide by the policies governing the Lease with Option to Purchase Program.

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9.9 The Contract of Lease with. Option to Purchase shall be terminated upon the occurrence of any of the following:

9.9.1 Non-payment of three (3) monthly rentals;

9.9.2 Voluntary cancellation on the part of the lessee;

9.9.3 Violation of the terms and conditions of the lease; or

9.9.4 Expiration of the Contract of Lease with Option to Purchase, without the lessee exercising his option to purchase the property.

9.10 The lessee shall be required to exercise his option to purchase not later than the end of the term of the lease. He shall inform the Fund in writing of his intention to exercise his option to purchase at any time during the term of the lease.

9.11 The lessee may purchase the property by paying the selling price of the subject property in cash or installment. Refer to Item Vl.1 for details on the mode of payment. The selling price shall be based on the appraised value of the property at point of execution of Contract of Lease net of the applicable discount, and unused one (1) month advance and/or two (2) months security deposit.

9.12 A Notice of Termination of the Contract with a Notice to Vacate shall be issued to the lessee upon occurrence of any of the grounds for termination of lease as mentioned above. The lessee shall pay all his outstanding obligations including penalty charges to Pag-lBIG Fund and shall vacate the leased premises within the prescribed period from receipt of the said notice.

VII. OTHER PROVISIONS

1. It is incumbent upon the buyers to make the necessary investigation, inspection and verification of property/ies for sale before making an offer. Buyers must likewise make the necessary confirmation before purchasing the property.

2. For properties that were not sold after exhausting all modes of disposal, the applicable discount may be adjusted based on the Fund's Asset Pricing Model.

3. The Fund may outsource the eviction process for properties illegally occupied.

4. In the event that a representative acts on behalf of an offeror, the former must submit together with the required forms, a Special Power of Attorney to represent an individual person or Secretary's Certificate for juridical entities.

5. Pag-lBIG Fund reserves the right to reject any and all bids/offer, to waive any formality therein, to accept such bids/offers as may be considered most advantageous to the Fund.

VIII. AMENDMENTS

The Board authorizes the Senior Management Committee to formulate and issue guidelines and procedures in furtherance of the objectives of this program consistent with the mandate of the Fund under its charter and existing laws.

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IX. MECHANISM ON RESOLUTION OF ISSUES

Any issue in the interpretation and implementation of this Guidelines shall, as much as possible, be resolved by the concerned officer. Matters that are not thereby satisfactorily resolved shall be escalated to the next higher approving authorities.

X. REPEALING CLAUSE

This Guidelines shall repeal the following Pag-lBIG Fund Circulars:

1. Circular No. 358 or the "Guidelines on the Disposal of Pag-lBIG Fund Acquired Assets through a Memorandum of Agreement with Project Proponents";

2. Circular No. 383 or the "Guidelines on the Sale of Pag-lBIG Fund Real and Other Properties Acquired";

3. Circular No. 392 or the "Supplemental Provisions on Bulk Sale Transactions under the Sale of Pag-lBIG Fund Real and Other Properties Acquired";

4. Circular No. 395 or the "Guidelines on the Group Sale of Pag-lBIG Fund Real and Other Properties Acquired"; and

5. Circular No. 405 or the "Amendments to the Guidelines on the Group Sale of Pag-lBIG Fund Real and Other Properties Acquired".

The short-term installment period under Circular No. 372 or the "Guidelines Implementing the Pag-lBIG Fund Real Estate Broker's Accreditation Program" shall be aligned with the provisions of this Guidelines.

All other memoranda, rules, regulations and other issuances contrary to or inconsistent with the provisions of this Guidelines are hereby repealed, amended or modified accordingly.

XI. EFFECTIVITY

This Circular takes effect after fifteen (15) calendar days following the completion of its publication in the Official Gazette or in a newspaper of general circulation .

Makati City,

July 31, 2019

. MOTi

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