Copyright©2007 Social Housing Finance Corporation
What is Community Mortgage Program (CMP)?
The CMP is a financing scheme to assist and enable informal settlers, slum dwellers or residents of blighted areas, in purchasing, through their duly-registered community association (CA), the land they occupy or the land where they will be relocated. To avail of this scheme, a written agreement between the landowner and the CA should be prepared, wherein both parties are willing to sell and purchase the property.
The program utilizes an innovative system of mortgage financing whereby an undivided tract of land maybe acquired by several beneficiaries under the concept of community ownership.
1. Land acquisition (financing for the acquisition of land occupied by the CA, or where they will be relocated to);
2. Site development (financing for the horizontal development of the acquired property and the individual titling of the lots
assigned to the member-beneficiaries; and
3. Home improvement or housing materials.
These three stages of financing may be availed through a single line facility if the community desires so..
Who are eligible to avail of the CMP?
A beneficiary applying for CMP should posses all the following qualifications:
must be from 18 to 60 years old;
no lot registered under his/her name;
no existing housing loan from other banks or agencies; and
Note: A husband and wife can only be considered as a single loan entry, and could only avail of one loan.
What is the maximum loan that a beneficiary can avail of under the CMP ?
CMP allows a maximum loan of P120,000.00 per individual beneficiary in Metro Manila, and other highly-urbanized areas (HUA) and P100,000.00 outside of Metro Manila. This covers three stages: Land acquisition, site development, and house construction. The following table shows the loan limit for each stage.
Purpose Metro Manila/HUA Other Areas
- Undeveloped P80,000.00 P45,000.00
- Developed P80,000.00 P60,000.00
House construction P40,000.00 per beneficiary
Note: Should the beneficiary avail of the maximum loan for the lot acquisition, they can no longer be entitled to a loan intended for site development. The loan for house construction, however, will still be available whether or not the beneficiary had availed of the maximum loan for site acquisition.
What type of lot can be used as a collateral under the CMP loan?
The property should be covered by a Transfer Certificate of Title (TCT), which is classified as residential and must be free from lien and encumbrances.
How can an originator be accredited in the CMP?
Any community-based organization, may it be a local government unit (LGU), a national government agency (such as the National Housing Authority), a bureau or a corporation, or a non-government organization (NGO) may apply for accreditation in SHFC provided the following requirements were met and submitted:
Council/Sangguniang Bayan Resolution
Permanent unit/department that will handle the processing of CMP
NGO or private originators
SEC/CDA registration and articles of incorporation/code by-laws
Bio-data of officers indicating past and present positions held in relation to involvement in community
economic/social development projects. (Please include references)
Board resolution or secretary's certificate (indicating the organization's decision to originate the project)
Track record in CMP and/or social housing (i.e. If any of the major officers of the organization has been involved in at
least one successful CMP project, and/or has completed/accomplished a social housing project).
Other government entity i.e. NHA
Copy of charter (if entity is not involved in housing)
Authority from board/head of office to originate
How is the appraisal of the property conducted?
The Technical Services Department (TSD) of SHFC conducts property appraisal using the market data approach. This approach considers several factors to determine the value of the collateral property such as proximity to existing establishments, development in the vicinity and in the CMP area, land area appraisal of previously approved CMP in the vicinity.
Who are the keyplayers of the CMP and their respective roles?
The successful implementation of the CMP needs four keyplayers: SHFC, the landowner, the CA, and the originator. Their respective roles are as follows:
Executes a contract to sell his property to the CA through the CMP
Updates real estate taxes on the property (residential)
Pays the transfer tax and defrays legal and notarization
Bears expenses relative to the execution of the deed of sale in favor of the CA
Provides road right of way (RROW).
Executes a collection agreement with SHFC, stating its commitment to collect from its member-borrowers their
shares in monthly amortization of the CMP and remit the same to the said agency
Keeps individual records of paid and unpaid amortization of its member-borrowers together with the records of paid
and unpaid amortization of the CA
Finds qualified substitute member-borrower/s (in case of default in the payment of monthly amortization shares of any
member-borrower/s) who shall assume the obligations of the defaulting member-borrower/s
Prepares the individual titling of the property in the name of the member-borrower/s.
Note: The obligations of the member-borrower/s remain joint and binding as long as the title to the property is not yet subdivided and transferred in the names of its individual member-borrowers. The CA should also signify, within a year, from the release of the CMP loan, if it intends to individualize the mother title for transfer to its
Screens qualifications of beneficiaries and warrants that the CA is a bonafide association and its acts are voluntary
Explains the responsibilities and financial obligations of the members under the CMP
Trains the officers of the CA on the collection, remittance, and record keeping of all amount received by and accruing
to the CA
Undertakes, jointly with the CA, the individualization of the title/s of the property acquired through CMP
Social Housing Finance Corporation
Evaluates the originator, the project, and the CA based on the submitted complete documentary requirements
Conducts site inspection (SI) and title verification (TV) of the property
Conducts background investigation (BI) of the originator, especially if this is a new one, and the CA
Prepares recommendation for project enrollment and program participation of new originators to the CMP credit
Finances the lot acquisition, site development and housing assistance loan of the CA.