This bill seeks to benefit the homeowners who are in default in the payment of 
their monthly amortization, not because of their own making, but because of the 
hardships brought about by the economic contraction that the country has had to face 
since the Asian financial crisis in 1997. 
Republic Act 8501 was enacted in 1998 to remedy the problem but out of 
181,349 defaulting accounts, only 19,612 have availed of the program. Of those that 
availed of the benefits of the program, about 40% are again in default. Since 1997 
many of our countrymen have lost their jobs as many businesses closed shop and 
many have not yet fully recovered since the crisis begun. 
This measure will save many of our countrymen who face the grim prospect of 
losing their respective houses from joining the ranks of the homeless, rescuing in turn a 
considerable part of the National Shelter Program. 
Hence, approval of this bill is urgently sought. 


1 
2 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
Be if enacted by the Senate and fhe House of Represenfafives of fhe Philippines in 
Congress assembled: 
SECTION 1. Title. - This Act shall be known as the "Socialized and Low-Cost 
Housing Loan Restructuring Act of 2007." 
SECTION 2. Restructuring of Delinquenf Socialized and Low-Cosf Housing Loan 
Accounts. - In keeping with the Constitutional mandate for the State to undertake a 
continuing program of urban land reform and housing that will make available at 
affordable cost decent housing and basic services, there is hereby established a 
Socialized and Low-Cost Housing Loan Restructuring Program. Under this program: 
a. for three (3) years from the effectivity of this Act, all socialized housing loans 
or loans amounting to Two Hundred .Twenty-Five Thousand Pesos 
(P225,OOO.OO) and below, and all low-cost housing loans or loans amounting 
to over Two Hundred Twenty-Five Thousand Pesos (P225,OOO.OO) but not 
exceeding Five Hundred Thousand Pesos (P500,OOO.OO) with any of the 
government financing institutions and agencies involved in the National 
Shelter Program (NSP), including but not limited to, the Government Service 
Insurance System (GSIS), Social Security System (SSS), Home Development 
Mutual Fund (HDMF), National Home Mortgage Finance Corporation 
(NHMFC), Home Guaranty Corporation (HGC), and the National Housing 
Authority (NHA) that have at least a six (6)-month unpaid monthly 
amortization are hereby declared covered by the benefits of this restructuring 
program notwithstanding that the same account has availed of the benefits of 
a previous restructuring or condonation program and even if the annual total 


1 
2 
Pesos (P300,OOO.OO); 
family income of the borrower-applicant exceeds Three Hundred Thousand 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
30 
31 
32 
33 
34 
35 
b. an application for restructuring sliall only be charged a processing fee which 
shall be lower than those charged under previous restructuring or 
condonation programs and no downpayment shall be required for a borrower 
to apply for the benefits of this restructuring program; 
c. all penalties and surcharges shall be condoned upon filing of the restructuring 
application under this Act. Provided, That all accrued interests shall be added 
to the remaining balance of the principal, the aggregate of which shall be 
considered as the new principal amount: Provided further, That waiver of 
penalties, surcharges and accrued interests for accounts subject of buy back 
or other default arrangements with government financing institutions (GFls) 
under the National Shelter Program or" the Government shall be left to the 
discretion of the respective boards of such GFls; 
d. a borrower-applicant may be allowed to use the total accumulated value of 
hislher membership contribution or savings with the GSIS, SSS or HDMF to 
pay in full or in part hislher housing loan; 
e. the term of a housing loan account being applied for restructuring may be 
extended for a period longer than its original term in order to lower the 
amount of the monthly amortization to a maximum of One Thousand Five 
Hundred Pesos (P1,500.00) for a period of three (3) years from the approval 
of the application, after which, the monthly amortization will revert back to its 
original amount. The unserviced portion ensuing from the three (3)-year 
lowered monthly amortization shall be paid on the last year of the term of the 
housing loan with the last monthly amortization. In the event that the borrower 
fails to pay any amortization during the three (3)-year period, helshe shall 
voluntarily surrender hislher property without need of judicial proceedings; 
f. in case of incapacity of a borrower, hislher legal heirs and successors-in- 
interest may assume payment of hidher outstanding housing loan; and 
g. loan restructuring under this Act may be availed of only once. 
All corresponding penalties and surcharges which the NHMFC may have to pay 
its funders as a result of the implementation of this Act shall be automatically adjusted 
and condoned. 
SECTION 3. 
Exclusion from Coverage. - In no instance shall the following 
housing loan accounts be covered by this Act: 
2 


1 
a. any account without a single payment since take out; 
2 
3 
4 
5 
6 
I 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
30 
31 
32 
33 
34 
35 
b. an account whose housing unit has been abandoned by the borrower-owner 
for more than two (2) years; 
c. an account whose housing unit is occupied by a third party other than the 
original registered beneficiary; and 
d. an account that has been foreclosed, the title of which has already been 
consolidated/transferred in the name of the GFI. 
SECTION 4. Remedies Against Delinquenf Accounts. - The GFls shall continue 
to exercise their right to foreclose properties covered by accounts excluded in 
subparagraphs (a) through (d) under Section 3 hereof or of delinquent accounts of 
borrowers who shall fail to avail of the benefits of this Act and that such foreclosure 
proceedings shall be exempt from publicafion and from the payment of filing fees, 
posting of the date and place of auction shall be made in at least three (3) conspicuous 
public places similar to that provided Tor under Act 3135: Provided furher, That notice 
to the borrower at his last known address shall likewise be made. 
SECTION 5. Declaration of Dividends. - The declaration of dividends of the 
funds managed by the GSIS, SSS and HDMF shall be limited to their members who 
have not availed of the restructuring program under this Act. 
SECTION 6. Incentive for Prompt Payment of Monthly Amortization. - Upon the 
effectivity of this Act, all accounts whose monthly amortization are paid on time shall be 
entitled to a reasonable discount on loan interest. 
SECTION 7. Implementing Rules and Regufations. 
~ There is hereby created an 
inter-agency committee headed by the Housing and Urban Development Coordinating 
Council and composed of all the government institutions and agencies enumerated in 
Section 2 hereof tasked to promulgate the implementing rules and regulations within 
sixty (60) days from the effectivity of this Act. 
SECTION 8. Congressional Oversight Committee. - There is hereby created a 
Congressional Oversight Committee composed of the Chairman of the House 
Committee on Housing and Urban Development and the Chairman of the Senate 
Committee on Urban Planning, Housing and Resettlement, five (5) members of the 
Senate and six (6) members of the House of Representatives. The members from the 
Senate shall be appointed by the Senate President from among the members of the 
Senate Committee on Urban Planning, Housing and Resettlement based on the 
proportional representation of the patties or coalition therein. The members from the 
House of Representatives shall be appointed by the Speaker from among the members 
3 


1 
2 
9 
10 
11 
12 
13 
of the House Committee on Housing and Urban Development based on the 
proportional representation of the parties or coalitions therein. 
The Oversight Committee shall review and approve the Implementing Rules and 
Regulations. It shall also review the performance of the GFIs and agencies involved in 
the implementation of this Act. 
SECTION 9. 
Repealing Clause. - All laws, executive orders, rules or 
regulations, or any part thereof, inconsistent with any provisions of this Act are hereby 
repealed or modified accordingly. 
SECTION I O .  Effectivity Clause. - This Act shall take effect fifteen (15) days 
after its complete publication in the Official Gazette or in at least two (2) newspapers of 
general circulation. 
Approved, 
4