Social Security System (SSS) Housing Loan

For many of us, owning our dream home is something that takes a long long time to materialize. It’s safe to say that this is a one time investment in this lifetime to move from a house we live in to our own dream home. After all home is where the heart is. If your heart has chosen that home, how long are you willing to wait to make it yours? Since getting your home is a quite a big affair, this calls for a thorough research backed by flawless planning, especially with regard to the monetary aspect involved in the process.

Although on a lot of occasions it makes sense to continue renting a house because of the factor of affordability, one must not shy away from getting your own home. Get it, to either live in it or to make that investment that will yield you profits in the long run. There are numerous options that will help you finance your purchase. A home loan is the best option.

Before you decide to go in for a home loan, you must be aware of available options and be sure of certain aspects to determine your readiness before you buy a home. In the Philippines, you have two options to avail a home loan - A public loan in the form of SSS and Pag-IBIG and private loans in the form of banks.

The public form of availing loans in the Philippines is a very interesting one. The Social Security System (SSS) is popularly known as the Direct Housing Loan Facility for Overseas Filipino Workers. The facility particularly aims to provide low cost housing options to Filipino workers abroad.

Below is an exhaustive checklist of all the requirements and qualifications that the Social Security System (SSS) for all potential loaners of a housing loan in the Philippines.

The Overseas Filipino Worker (OFW)

Below are a list of conditions under which you will be considered an OFW:

1. You must be currently deployed with a valid contract. This contract should be processed through the POEA or can be authenticated by the Embassy of the country you are living in.
2. For all those Filipinos whose contracts of employment are in the process of deployment or renewal the release of the loan will only take place after the contract is deployed or renewed.
3. Immigrants or citizens of other foreign countries but are keen on purchasing housing units for their families who still reside in the Philippines.
4. Long-term resident overseas Filipinos who desire to avail a house either for themselves after retirement or for their extended families.

Allowable Amount and Terms of the Loan

As quoted by the President of the Social Security System, Emilio de Quiros Jr., members can borrow an amount up to Php 2,000,000.

The rates of interest for the same are elucidated as follows:

Loan Amount Borrowed	Rate of Interest per annum
Up to Php 1 Million	9 percent per annum
Php 1,000,001 to Php 1.5 Million	10 percent per annum
Php 1,500,001 to Php 2 Million	11 percent per annum

The rates of interest depends largely on the appraisal and the loan can be repaid in years that are multiples of five (5) up to an upper cap of 15 years. This is applicable for all OFWs. For borrowers aged 60 at the time of application, the maximum loan term is 5 years.

Eligibility

The following conditions must be fulfilled to be eligible for a loan from the Social Security System:

1. The applicant must not be more than 65 years of age at the time of application.
2. The applicant must be an active member of the SSS and must have paid at least 12 months of continuous contributions or 24 months of contributions in total.
3. The applicant must be an Overseas Filipino Worker.
4. The applicant should not have been granted a housing loan previously by the SSS, neither a retirement or total disability benefit or refund of contributions to the SSS. The applicant must be up-to-date in the SSS contribution payments and loan EMIs.

Collaterals

First, the loan shall be secured by a Real Estate Mortgage on the house and lot that needs financing.

The Real Estate Mortgage shall then be annotated on the buyer's TCT and will be registered with the appropriate registry of deeds. This is also covered by an HGC guaranty.

Documentation Requirements for the loan

Below are the list of documents that are required to be submitted upon application of the loan:

1. Application for home loan by the mortgagor, along with original ID pictures of the Principal Applicant and the spouse.
2. Original Certificate of loan eligibility (Service Fee - Php 100)
3. Notarized photocopy of the latest contract of employment
4. A photocopy of the latest Property Tax Declaration and realty Tax Receipt.
5. Original contract to sell. This document must have a statement of the latest balance.
6. Blueprint of the building plans/pictures of the house and other specifications.
7. Original copy of the Special Power of Attorney, if the application is being filed through a representative.
8. Certified, true copy of the owner’s copy of the Original/Transfer Certificate of the Title.
9. Original copy of certification from POEA, OWWA, DOLE and SSS foreign representative office or Philippine Embassy/Consular Office.
10. Blueprint of the lot plan along with the vicinity map sealed and signed by Registered Surveyor and Geodetic Engineer.
11. Original copy of the confirmation of completion and appraisal from Home Guaranty Corporation.
12. 12 post dated checks to cover 12 installments and shall be repeated every 12 months until the loan is paid in full.
13. Original copy of the Certificate of Acceptance and Occupancy signed by the borrower if the house that is being purchased is 100% complete at the time of filing for the loan.
14. A certified true copy of the Original Transfer Certificate Title which is issued by the Registry of Deeds.

Things to Remember during the Documentation Process:

1. The application fee is half of 1% of the loan amount or Php500, whichever is higher. This is applicable for both - low cost housing and socialized housing.
2. The inspection fee is Php500 for both outside and within Metro Manila.
3. The applicant must present all original documents and submit a photocopy of the same set for all authentication purposes.
4. The applicant must be up-to-date with regard to all existing loan accounts with SSS. This is subject to verification by the Real Estate Department at SSS.
5. SSS can ask for additional documents if deemed necessary.

Application Process

Once you have all the documents that are required, you can walk into the nearest SSS office or a foreign representative office or a Real Estate Department to file your application for a housing loan.

Purposes of the Loan

This loan can be availed for any of the below mentioned purposes:

1. To purchase an already existing residential unit. This could be a house, a lot, a townhouse or even a condominium.
2. To construct a new house on a lot. The lot must be owned by the applicant and should be free from encumbrance or lien.

Repayment of the Loan Amortization

The repayment of the loan amount can take place by issuing twelve post dated checks for twelve amortizations of the loan. This process will be repeated every year until the loan is fully settled.

As mentioned above, non - OFWs are also eligible to apply for home loans with the SSS but only for the purpose of home improvements and renovations.

Below is an exhaustive checklist of all the requirements and qualifications for home improvements and renovations in the Philippines.

Allowable Amount and Terms of the Loan

The maximum loanable amount available by SSS will be the lowest of the following and under any circumstance not exceed Php 1,000,000.

• Amount applied for
• Actual need as determined by the SSS
• Amount justified by the paying capacity
• 90% of the appraised value of the property that will be mortgaged

This loan charges a 9 percent rate of interest per annum and is subject to review every 5 years. The loan can be repaid over a tenor of up to 20 years.

Eligibility

The following conditions must be fulfilled to be eligible for a loan for renovations and home improvement from the Social Security System:

1. The applicant must not be more than 65 years of age at the time of application.
2. The applicant must be an active member of the SSS and must have paid at least 24 months of continuous contributions before applying for the loan or 36 months of contributions in total.
3. The applicant should not have been granted a house improvement loan previously by the SSS or NHMFC, neither a retirement or total disability benefit or refund of contributions to the SSS. The applicant must be up-to-date in the SSS contribution payments and loan EMIs.
4. If the housing loan has been restructured, the Supplemental Mortgage Contract has to be submitted.

Collaterals

First, the loan will be secured by a first mortgage on the house that needs to be renovated/improved. The lot must have a clean title and must be registered under the Torrens System in the name of the borrower and their borrower as a co-applicant.

The property that is mortgaged to the SSS or the NHMFC or National Home Mortgage Finance Corporation is acceptable if the renovation or improvement loan is filed directly at SSS.

Documentation Requirements for the Loan

Below are the list of documents that are required to be submitted upon application of the loan:

1. Application for home loan by the mortgagor, along with original ID pictures of the Principal Applicant and the spouse.
2. Self-employed Filipinos have to submit ITRs of the last three years with the corresponding form W-2, Confirmation Receipts and financing statement, Form RS-1, SSS Form E-1 and license of business.
3. Self employed voluntary members, premium receipts and Payment Return Form RS-5 is required.
4. Overseas workers have to submit contract and certificate of employment and Form RS-5.
5. A copy of the latest Property Tax Declaration and Realty Tax receipt.
6. Certified True Copy of the original TCT issued by the Registry of Deeds.
7. A copy of the affidavit of undertaking to continue paying monthly SSS premium contributions for the entire duration of the loan. This is applicable to Voluntary and Self-Employed members only.
8. Pictures of the existing house and all areas/portions that need to be renovated and/or improved.
9. Owner’s copy of the Original/Transfer Certificate of Title.
10. If the already existing home loan is a joint application with the SSS, a written conformity by the co-applicant is a mandate document.
11. Blueprint of the lot plan along with the vicinity map sealed and signed by Registered Surveyor and Geodetic Engineer.
12. A copy of the itemised scope of work with a corresponding sketch plan or old building plans for the proposed renovation.
13. A copy of the building plans and working drawings of the required improvement signed and sealed by an architect or a civil engineer.
14. Building and construction specifications authenticated by a civil engineer or architect.
15. If the applicant has availed an SSS housing loan, the Housing Loan Certification must be secured by the Real Estate Loan Accounting Department.

Application Process

Once you have all the documentation in place, all the loan applicants can file their applications at the Real Estate Department in Quezon City.

Purposes of the Loan

This loan can be utilized to finance the below mentioned list only:

1. Completion of an occupied bare house.
2. Major repairs particularly for structurally unsafe housing units that are dilapidated.
3. Construction of a concrete fence and sturdy steel gate.
4. Installation of a well and motor pump.
5. Extension, expansion or enhancement of economic and aesthetic value of an existing house. The requested improvements shall be permanently attached to the house.

Repayment of the Loan Amortization

If the loan is directly filed at the SSS, the repayment has to follow the Mandatory Payroll Deduction System.

For all voluntary and self employed members of the SSS, a minimum of twelve post dated checks should be issued towards the amortization. This process must be repeated every year till the loan is repaid in full.