Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:

SECTION 1. Title. — This Act shall be known as the Abot-Kaya Pabahay Fund, otherwise known as the Social Housing Support Fund Act.

SEC. 2. Policy. — It is hereby declared as the policy of the Government to promote the national shelter program and to implement a continuing program of social housing that shall make available to low-income families affordable houses and/or lots equitably distributed in the fourteen (14) regions of the country by establishing a financial support system that shall encourage the active participation of the private sector.

SEC. 3. Fund System. — To carry out the purpose of this Act, there is hereby created the Abot-Kaya Pabahay Fund, hereinafter referred to as the Fund, in the amount of Two billion and five hundred million pesos (P2,500,000,000.00) to be constituted over a period of five (5) years through a continuing yearly appropriation of Five hundred million pesos (P500,000,000.00) from the National Government.

This Fund shall be used exclusively for the objectives of enhancing affordability of low-cost housing by low-income families, providing developmental financing for low-cost housing projects, and eliminating risks for the funding agencies involved in housing, namely: the Social Security System (SSS), the Government Service Insurance System (GSIS) and the Home Development Mutual Fund (HDMF).

The Fund shall be devoted to provide amortization support, expedite the development of land into suitable sites for social housing by providing developmental financing to developers of low-cost housing projects, and establish a strong guarantee system to ensure viable cashflow for the funding agencies involved in housing.

To augment the Fund, the President shall avail of portions of grants, assistance, programs and concessional loans from foreign governments with maturities of twenty-five (25) to thirty (30) years or more and carrying soft interest to generate the peso equivalent of Five hundred million pesos (P500,000,000.00) per year for five (5) years.

1. Amortization Support. A borrower shall be eligible to apply for amortization support to the National Home Mortgage and Finance Corporation pursuant to Section 4(a) of this Act: Provided, That he has the following qualifications:
   
   
   1. Has a gross family income per month as hereinafter provided;
   2. Has not been a recidivist or a habitual delinquent as to offenses involving moral turpitude; and
   3. Is not a homeowner and has not been the recipient of any housing loan or housing unit from any agency, financial institution or office for the last five (5) years.
      
      
   Level A. Eligible borrowers with a gross family income of not exceeding Four thousand pesos (P4,000.00) per month, who apply for loans of not exceeding Eighty thousand pesos (P80.000.00), shall be entitied to the following monthly amortization support for the first five (5) years of the loan amortization period:
   
   

   Amortization Period	Amortization Support
   months 1 to 12	35% of monthly amortization
   months 13 to 24	30% of monthly amortization
   months 25 to 36	25% of monthly amortization
   months 37 to 48	20% of monthly amortization
   months 49 to 60	14% of monthly amortization

   
   Level B. Eligible borrowers with a gross family income of not exceeding Five thousand pesos (P5,000.00) per month, who apply for loans of over Eighty thousand pesos (P80,000.00) but not exceeding One hundred thousand pesos (P100,000.00), shall be entitled to the following monthly amortization support for the first five (5) years of the loan amortization period:
   
   

   Amortization Period	Amortization Support
   months 1 to 24	25% of monthly amortization
   months 25 to 36	20% of monthly amortization
   months 37 to 48	14% of monthly amortization
   months 49 to 60	7% of monthly amortization

   
   The aforesaid amortization support shall apply only to loans granted from the approval of this Act to five (5) years thereafter on a first-come-first-served basis to eligible borrowers as herein defined.
   
   Loans under this Fund shall not be subject to such charges, fees or premiums except minimum processing fees to be charged by developers, mortgage redemption insurance and fire insurance premiums. If during the amortization period the property acquired or built on the proceeds of the loan is lost or seriously damaged due to force majeure for which the borrower is not in any way responsible, the administering agencies are authorized to liberalize the terms of repayment or waive the same depending on the equities of the situation.
   
   Amortization support for Level A borrowers shall not be less than sixty percent (60%) of all available funds allotted for the purpose.
   
   At least forty percent (40%) of the yearly appropriation for the Fund shall be for amortization support to Level A and Level B borrowers.
   
   
2. Developmental Financing. There is hereby established a developmental financing system whereby proponents of low-cost housing projects with a selling cost of not exceeding Sixty thousand pesos (P60,000.00) per house and/or lot package, which shall be available exclusively for Level A eligible borrowers, shall be entitled to a developmental financing loan of not exceeding eighty percent (80%) of the entire project cost.
   
   At least fifteen percent (15%) and not more than twenty percent (20%) of the yearly appropriation for the Fund shall be for developmental financing: Provided, That the unused funds for developmental financing shall be utilized for Level A amortization support.
   
   
3. Cashflow Guarantee. There is hereby established a cashflow guarantee system such that loans of not exceeding One hundred fifty thousand pesos (P150,000.00) with an interest rate of not exceeding twelve percent (12%) per annum originated by the funding agencies or their accredited financial institutions shall be assigned to the Fund immediately after origination for which the Fund shall issue promissory notes of similar cashflows as the assigned loans guaranteed by the Republic of the Philippines.

SEC. 4. Corporate Powers. — (a) National Home Mortgage and Finance Corporation (NHMFC). In addition to its powers and functions vested under Presidential Decree No. 1267, the National Home Mortgage and Finance Corporation, hereinafter referred to as the NHMFC, shall establish the amortization support and developmental financing systems in accordance with subsections (a) and (b) of Section 3 hereof, exercise administration and control over the fund allotted for amortization support and developmental financing, and act as trustee thereof.

(b) Home Insurance and Guaranty Corporation (HIGC). In addition to its powers and duties vested under Executive Order No. 535, as amended, the House Insurance and Guaranty Corporation, hereinafter referred to as the HIGC, shall establish the cashflow guarantee system in accordance with subsection (c) of Section 3 hereof, exercise administration and control over the fund allotted for cashflow guarantee, and act as trustee thereof.

(c) Powers and functions of administering agencies. The NHMFC and the HIGC as administering agencies and trustees of the Fund shall exercise the following powers and functions:

1. To make policies and guidelines as well as adopt, amend and rescind such rules and regulations as may be necessary to carry out the provisions and purposes of this Act;
2. To submit annually to the President of the Philippines and to the Congress of the Philippines not later than March 15, and make available to the general public a detailed report covering its investments, operations and other activities in the implementation of this Act, including information and recommendations for the development and improvement of the Fund;
3. To submit annually to Congress for approval through the Department of Budget and Management its budget of expenditures to carry out the purpose of this Act;
4. To acquire, utilize or dispose of, in any manner recognized by law, real or personal properties to carry out the purpose of this Act;
5. To set up its own accounting and computer system; to conduct continuing actuarial and statistical studies and valuations to determine the financial viability of the Fund and its projects; to require reports, compilation and analysis of statistical and economic data, as well as make such other studies and surveys as may be needed for the proper administration and development of the Fund;
6. To have the power of succession; to sue and be sued; to adopt and use a corporate seal;
7. To enter into and carry out contracts of every kind and description with any person, firm, association or corporation, domestic or foreign, to carry out the purpose of this Act;
8. To invest, own or otherwise participate in or establish and maintain a subsidiary or subsidiaries in relation to the purpose of the Fund under this Act; and
9. To exercise such powers and perform such acts as may be necessary, useful, incidental or auxiliary to carry out the provisions of this Act.
   

SEC. 5. Powers and Duties. — The management of the NHMFC and the HIGC shall have the following powers and duties relative to the Fund:

1. To formulate policies, rules and regulations to carry out effectively the purpose of the Fund under this Act and to publish such policies, rules and regulations in Filipino and English at least once in a newspaper of general circulation;
   
2. To direct the operations and administration of the Fund;
   
3. To authorize expenditures of the Fund in the interest of effective administration and operations; to adopt, from time to time, the budgets for said purposes;
   
4. To approve appointments of personnel; and
   
5. To exercise such other duties as may be necessary to carry out the corporate powers under Section 4 hereof and accomplish the purposes for which the Fund is established.
   

SEC. 6. Investments. — Without prejudice to its primary purpose, all moneys of the Fund not needed to meet current amortization support, developmental financing, cashflow guarantees, administrative and other operational requirements shall be invested in government securities and/or deposited in government banks to ensure its liquidity, safety and growth.

SEC. 7. Administrative Cost. — The Fund shall bear the costs of its administration and development in such amounts and/or limits as the administering agencies shall deem appropriate, but not exceeding one percent (1%) of the net Fund assets of the previous year.  Expenses for organization and initial operations shall be provided by the administering agencies as advances, subject to reimbursement.

All appropriations under this Act shall be released quarterly in four (4) equal installments to the administering agencies in accordance with the allotment of the Fund under Section 3 hereof.

SEC. 8. Appropriations. — The amount needed to implement this Act shall be included in the General Appropriations Bill next submitted following its approval.

SEC. 9. Audit. — The Chairman of the Commission on Audit shall act as the auditor of the Fund and, accordingly, is empowered to appoint a representative and other subordinate personnel to perform and report on such audit duties, responsible to and removable only by the Chairman of the Commission on Audit.

SEC. 10. Reports. — In addition to the annual report provided for under paragraph 2, subsection (c), of Section 4 hereof, the administering agencies are hereby mandated to submit quarterly detailed reports of its operations and performance to the Congress of the Philippines, including a list of beneficiaries.

SEC. 11. Fund Supervision. — Particular aspects of the Fund's administration may be subject to supervision, visitation or verification by appropriate agencies of the Government as may be designated and authorized by the President of the Philippines or the Congress of the Philippines.

SEC. 12. Repealing Clause. — Any provision of law, decree, executive order, rule or regulation in conflict or inconsistent with the provisions and/or purposes of this Act is accordingly repealed, amended or modified.

SEC. 13. Effectivity. — This Act shall take effect upon its approval and publication in at least two (2) national newspapers of general circulation.

Approved,

(Sgd.) JOVITO R. SALONGA	(Sgd.) RAMON V. MITRA
President of the Senate	Speaker of the House of Representatives

This Act which originated in the House of Representatives was finally passed by the House of Representatives and the Senate on November 28, 1989 and November 23, 1989, respectively.

(Sgd.) EDWIN P. ACOBA	(Sgd.) QUIRINO D. ABAD SANTOS, JR.
Secretary of the Senate	Secretary of the House of Representatives

Approved: January 24, 1990