The Abot Kaya Pabahay Fund – Development Loan Program (AKPF-DLP) was established to support the development of affordable housing for low-income families in urban areas. Created under Republic Act 6846 and later expanded by Republic Act 7835, the program provides financing for site development, housing construction, and small-scale socialized housing projects. Managed by the Social Housing Finance Corporation (SHFC), the AKPF-DLP is designed to complement other housing initiatives like the Community Mortgage Program (CMP) and the High-Density Housing (HDH) Program, ensuring that socialized housing projects have the necessary financial backing to be developed successfully.
For individual beneficiaries, the AKPF-DLP helps make homeownership more accessible by funding the construction of affordable housing projects in partnership with local government units (LGUs) and private developers. This means that qualified low-income families can benefit from well-planned, secure, and legally backed housing developments that provide a stable living environment. By addressing the financial barriers that often prevent socialized housing projects from moving forward, the program plays a key role in reducing the housing backlog and improving living conditions for Filipinos in need. This guide will tell you everything you need to know in order to learn more about how to apply for the program and enjoy its benefits.
Program Overview
The AKPF-DLP is an initiative by the SHFC to support socialized housing projects under the broader AKPF program. Unlike the AKPF, the AKPF-DLP only finances site development, upgrades, and construction of affordable housing for informal settlers and low-income families. It doesn’t cover amortization support for individual beneficiaries. Instead, it provided loans to corporations, single proprietorships, and LGUs working with accredited developers, ensuring that they are able to create housing projects that can meet the requirements of SHFC programs like the Community Mortgage Program (CMP) and the High-Density Housing (HDH) Program and can be offered to the target beneficiaries of socialized housing programs.
Program Features
The program’s most notable features include:
- Loan Purpose: The AKPF-DLP funds may be used for various development projects such as:
- Site upgrading and housing construction for CMP projects.
- LGU-sponsored housing projects, with financing through CMP, LCMP, or HDH programs.
- Development and construction of high-density housing units.
- Small-scale inner-city housing projects for socialized housing borrowers with secure end-user financing.
- Acquisition and development of foreclosed properties for socialized housing.
- Loan Amount and Terms
- CMP and LCMP projects: Up to ₱15 million.
- HDH Program projects: Up to ₱75 million.
- Interest Rate: Fixed at 6% per annum.
- Loan Term: Maximum 36 months after each drawdown, subject to project feasibility.
- Loan Security and Appraisal:
- The loan must be secured by mortgaged property with a clean title (Torrens Title System).
- SHFC or private appraisers accredited by the Bangko Sentral ng Pilipinas (BSP) will assess the property.
- Collateral coverage must be 80% of the appraised value, and total loan exposure should not exceed 80% of the completed project value.
- Loan Availment and Release
- Approved loans must be availed within one year to prevent cancellation.
- Staggered release based on project requirements:
- Initial release: Up to 50% of the appraised collateral value.
- Subsequent releases: Based on collateral and project progress (land development and housing construction).
- Loan Repayment
- Payments must be made quarterly, starting 18 months after initial loan release.
- Post-dated checks or end-user financing takeout will be required.
- Late payments incur a penalty of 1/20 of 1% per day (18% per annum) on the overdue amount.
- Penalty Rate & Loan Security
- Penalty Rate: 18% per annum for delayed payments.
- Loan Security: A mortgage on the property with a clean title free from liens or encumbrances.
Benefits
The program offers financial support to developers and local government units (LGUs) to ensure the successful construction of socialized housing projects. Here are the key benefits of the program:
- Funding for site development and housing construction under the Community Mortgage Program (CMP), Localized CMP (LCMP), and High-Density Housing (HDH) Program.
- Loan amounts of up to PHP 75 million for eligible housing projects.
- Low-interest rate of 6% per annum to make financing more affordable.
- Flexible loan terms of up to 36 months, with repayment options based on project feasibility.
- Staggered loan releases based on project progress, ensuring proper fund utilization.
- Collateral appraisal services conducted by SHFC or accredited private appraisers.
- Priority for borrowers with at least 5% equity contribution to encourage financial responsibility.
- Prequalification validity of one year, allowing time for project planning and development.
- Retention fee of 10% of the project cost, which ensures quality control and defect correction before final fund release.
- Insurance coverage for vertical works, protecting projects from unforeseen risks until they are handed over to beneficiaries.
Who Can Apply?
The program is open to:
- Corporations and partnerships involved in socialized housing.
- Single proprietorships with experience in real estate development.
- Local Government Units (LGUs) with partner developers.
Qualifications
To qualify for the program, applicants are expected to satisfy the following criteria:
- Must be a corporation, single proprietorship, partnership, or LGU with a qualified developer for socialized housing projects.
- Must have a proven track record of at least three (3) years in real estate development, particularly in socialized housing.
- The housing project must be eligible under the CMP or HDH Program administered by the SHFC.
- Must be able to provide at least 5% of the total project cost as equity contribution, as this improves loan approval chances.
- The proposed site must meet SHFC’s minimum site suitability criteria, ensuring it is appropriate for residential development.
- The project must be at least 10 hectares, or subject to further evaluation of the proponent’s financial, manpower, and equipment resources.
- The property must be registered under the Torrens Title System and free from legal disputes, encumbrances, liens, or adverse claims.
- If the property has existing encumbrances, the applicant must facilitate their cancellation within 60 days before executing the loan agreement.
- The applicant and landowner must assign a project controller to validate project accomplishment reports.
- Must comply with project implementation timelines, as delays beyond six (6) months may lead to loan cancellation.
- Vertical works must be insured against allied perils/calamities, with coverage valid until project turnover to beneficiaries.
Project Requirements
The project must also meet the following criteria:
- Site Suitability and Project Size
- Must meet SHFC criteria for site suitability.
- Projects over 10 hectares require additional evaluation of resources (equipment, manpower, and finances).
- Title and Legal Compliance
- Properties must be free from legal disputes and encumbrances.
- If encumbered, liabilities must be canceled within 60 days before signing loan agreements.
- Obligations related to CMP projects must be annotated as additional encumbrances.
- Project Implementation and Delays
- Developers must follow an approved implementation schedule.
- Commitment charge of 0.5% per month applies if projects stall for over 60 days.
- Loans are canceled after 6 months of non-availment.
- Insurance and Retention Fees
- Contractor’s All-Risk Insurance (CARI) is required for vertical projects.
- A 10% retention fee is withheld until defects are corrected and validated within 15 days of project completion.
- The retention fee will only be released after the necessary corrections are made, verified by SHFC, and a Certificate of Completion and Acceptance is issued by the beneficiary
- Project Control
- Both the proponent and landowner must assign a project controller to validate the project’s accomplishment reports.
- Transitory Provisions
- The AKPF-DLP will support land acquisition under the HDH Program and similar socialized housing initiatives. Its implementation will begin once the Office of the Government Corporate Counsel (OGCC) confirms the legality of its utilization.
Required Documents
To apply for the program, applicants must submit the following required documents in compliance with SHFC guidelines and to facilitate smooth loan processing.
General Requirements
- Application Form: Duly accomplished loan application form.
- Business Registration Documents:
- SEC/DTI registration for corporations, partnerships, and sole proprietors;
- LGU authorization for local government applicants.
- Proof of Experience: At least three (3) years of track record in real estate development.
- Project Proposal: Includes site development plan, financial feasibility study, and construction timeline.
- Proof of Equity Contribution: If applicable, documents proving at least 5% project cost contribution.
Collateral and Legal Documents
- Land Title Documents: Torrens title proving ownership, free of liens and encumbrances.
- Encumbrance Clearance: If applicable, proof of cleared liabilities within 60 days before loan execution.
- Deed of Assignment: Agreement in favor of the Abot-Kaya Pabahay Fund (AKPF).
Project Compliance Requirements
- Project Implementation Schedule: Detailed timeline with milestones.
- Insurance Coverage: Proof of Contractor’s All Risk Insurance for vertical structures.
- Retention Agreement: Acknowledgment of the 10% retention fee policy for quality assurance.
- Project Controller Designation: Appointment of a controller from both the proponent and landowner to validate reports.
Process Flow
The program follows a structured process flow that ensures proper financing, development, and repayment for socialized housing projects to ensure the proper allocation and repayment of funds, enabling the successful implementation of socialized housing projects under the AKPF-DLP.
Step 1: Community Association (CA) submits application documents
The CA enters into an agreement with a contractor or developer to avail of a development loan and house construction.
Step 2: Contractor/Developer applies for the Development Loan
The contractor or developer submits a loan application to SHFC to fund the housing project.
Step 3: SHFC releases the Development Loan
Once approved, SHFC disburses the loan to the contractor or developer to finance the housing development.
Step 4: Site development and housing construction commence
The contractor or developer begins work on site development and housing construction.
Step 5: CA repays the loan to SHFC
The CA commits to repaying the loan through a Deed of Assignment in favor of AKPF.
Step 6: CA amortizes the loan to SHFC
The CA pays the loan in installments until full repayment is completed.
Additional SHFC Housing Programs
Aside from AKPF-DLP, SHFC also offers:
- Community Mortgage Program (CMP): collective land acquisition financing.
- Localized Community Mortgage Program (LCMP): LGU-led housing projects, requiring a 25% counterpart contribution.
Video: Kapihan sa DHSUD: Housing Matters
The SHFC Abot Kaya Pabahay Fund – Development Loan Program (AKPF-DLP) provides significant financial support for developers, corporations, and LGUs involved in socialized housing. By following the application process and ensuring compliance with requirements, stakeholders can access funding to develop sustainable, affordable housing solutions for low-income families across the Philippines. To learn more about this and other housing matters and programs from various agencies, you may also check out this video from DHSUD: