PAG-IBIG Housing Loan Program: 4 Key Tips to Get Approved

Not everyone is ready or able to buy property right away.

If you’re thinking of applying for a PAG-IBIG Housing Loan, this page is a guide to increase your chances of approval when the time is right.

What is the PAG-IBIG Housing Loan Program?

The Home Development Mutual Fund (HDMF), more popularly known as the PAG-IBIG Fund, offers PAG-IBIG Housing Loan Program. The PAG-IBIG Housing Loan Program is especially designed for minimum and low-wage earners.

This program enables minimum and low-wage earners to purchase their own dream homes as it carries the lowest interest rate in today’s market – 3% annual interest – for the first 5 years of the loan term. With the PAG-IBIG Housing Loan Program, minimum and low-wage earners only need to pay a monthly amortization of as low as Php 2,445 for a Php580,000 housing loan!

Eligibility Requirements

To qualify for the PAG-IBIG Housing Loan Program, you need to satisfy the following requirements:

• You have to be an active PAG-IBIG Fund member
• You must have at least 24 monthly savings – lump sum payment of the required 24 months savings is not allowed
• You must not be more than 65 years old, and not more than 70 years old during the maturity of the ate of your loan application
• You must pass the credit/background and business/employment checks of PAG-IBIG Fun
• You must not have any outstanding PAG-IBIG Fund Short-Term Loan in arrears at the time of loan application
• You must have the legal capacity to acquire and encumber real property
• You must not have any PAG-IBIG Fund Housing Loan that was cancelled, foreclosed, defaulted, or subjected to dacion en pago. If you have an existing PAG-IBIG Fund Housing Loan account – either as the principal borrower or a co-borrower – it must be updated.

4 Key Tips to Get Approved

Here are 4 key tips to increase your chances of getting approved for the PAG-IBIG Housing Loan Program.

Tip #1: Maintain a stable job.

Your employment and job stability are two of the most crucial factors that PAG-IBIG assesses when you apply for a home loan. They can make or break your PAG-IBIG Housing Loan Program application – being able to show the agency that you have a steady source of income is essential for you to gain their trust and confidence.

Tip #2: Settle any overdue PAG-IBIG loans.

Do you have an outstanding loan with PAG-IBIG? Any overdue payments can negatively impact your chances of getting approved. Specifically, you must not have any PAG-IBIG Fund Housing Loan that was cancelled, foreclosed, defaulted, or subjected to dacion en pago.

Make sure to check your existing PAG-IBIG loan accounts – if any – to know if you have any overdue payments. Make sure to pay them off before you apply for the PAG-IBIG Fund Housing Loan.

Tip #3: Apply for a realistic home loan amount.

Qualified PAG-IBIG members can borrow up to Php 6 million to finance their dream homes. However, this doesn’t mean that you’ll be automatically approved for any amount that you request below that limit. PAG-IBIG will assess if your finances can handle the monthly repayments on your loan.

Carefully plan the amount that you’re going to borrow. Consider your current financial situation and your ability to repay a loan. Find out how much you can realistically pay in monthly installments.

Tip #4: Consider getting a co-borrower.

Not confident about your credentials as a borrower? Is your income insufficient to qualify for a loan? Consider getting a co-borrower. Having a co-borrower with excellent credit history and stable employment will help improve your chances of getting a PAG-IBIG Fund Housing Loan approval. PAG-IBIG allows 2 or 3 members (including the principal borrower) who are up to second-degree relatives to apply for a single housing loan. This means that you can enlist your spouse, parent, sibling, or cousin whose income will be added to yours.

Be careful when asking someone to sign on as your co-borrower. Not everyone will agree to be responsible for any unpaid debts that you make. As much as possible, look for a co-borrower whom you’ll share the new home with and who is truly willing to help you.

Final Thoughts

Applying for a PAG-IBIG Fund Housing Loan isn’t easy; neither is getting approval for the loan. It will take so much of your time, energy, and effort to comply with all of the eligibility requirements. However, it is definitely worth it once you get approved!

However, if your application gets rejected, don’t lose hope. There are other home financing options in the Philippines that you can avail at competitive rates.