AN ACT CREATING THE ABOT-KAYA PABAHAY FUND
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AN ACT CREATING THE ABOT-KAYA PABAHAY FUND
Republic Act No. 6846
January 24, 1990
Case Overview and Summary
Summary of Republic Act No. 6846 (Social Housing Support Fund Act)Policy and Objectives (Section 2):
- Promote the national shelter program and implement a continuing social housing program.
- Make affordable houses and/or lots available to low-income families across the 14 regions of the country.
- Establish a financial support system to encourage private sector participation in social housing.
Abot-Kaya Pabahay Fund (Section 3):
- Creation of a fund amounting to ₱2.5 billion over 5 years, with an annual appropriation of ₱500 million from the National Government.
- The fund shall be used exclusively for:
- Enhancing affordability of low-cost housing for low-income families.
- Providing developmental financing for low-cost housing projects.
- Eliminating risks for funding agencies involved in housing (SSS, GSIS, HDMF).
- The fund shall be devoted to:
- Provide amortization support (Section 3a).
- Expedite land development for social housing through developmental financing (Section 3b).
- Establish a guarantee system to ensure viable cash flow for funding agencies (Section 3c).
- The President shall avail of foreign grants, assistance, programs, and concessional loans to generate an additional ₱500 million per year for 5 years.
Amortization Support (Section 3a):
- Eligibility criteria for borrowers:
- Gross family income within specified limits.
- No record of offenses involving moral turpitude.
- Not a homeowner or recipient of any housing loan/unit in the last 5 years.
- Level A (income ≤ ₱4,000/month, loan ≤ ₱80,000): Amortization support for the first 5 years, ranging from 35% (months 1-12) to 14% (months 49-60).
- Level B (income ≤ ₱5,000/month, loan > ₱80,000 but ≤ ₱100,000): Amortization support for the first 5 years, ranging from 25% (months 1-24) to 7% (months 49-60).
- Amortization support applies only to loans granted within 5 years of the Act's approval, on a first-come-first-served basis.
- Loans shall not be subject to charges, fees, or premiums, except for minimum processing fees, mortgage redemption insurance, and fire insurance premiums.
- In case of property loss or damage due to force majeure, agencies may liberalize or waive repayment terms.
- At least 60% of amortization support funds shall be for Level A borrowers.
- At least 40% of the yearly appropriation shall be for amortization support.
Developmental Financing (Section 3b):
- Proponents of low-cost housing projects (≤ ₱60,000 per house/lot package for Level A borrowers) shall be entitled to a developmental financing loan of up to 80% of the project cost.
- 15-20% of the yearly appropriation shall be for developmental financing.
- Unused funds for developmental financing shall be utilized for Level A amortization support.
Cash Flow Guarantee (Section 3c):
- Establishment of a cash flow guarantee system for loans up to ₱150,000 with interest rate ≤ 12% per annum.
- The Fund shall issue promissory notes guaranteed by the Republic of the Philippines for assigned loans.
- 40% of the yearly appropriation shall be for the cash flow guarantee.
Corporate Powers and Administration (Sections 4-5):
- The National Home Mortgage and Finance Corporation (NHMFC) shall establish and administer the amortization support and developmental financing systems.
- The Home Insurance and Guaranty Corporation (HIGC) shall establish and administer the cash flow guarantee system.
- The NHMFC and HIGC shall have various powers and functions, including policymaking, reporting, budgeting, property acquisition, accounting, actuarial studies, contracting, and investment.
- The management of the NHMFC and HIGC shall formulate policies, direct operations, authorize expenditures, approve appointments, and exercise other necessary duties.
Investments, Administrative Costs, and Appropriations (Sections 6-8):
- Excess funds not needed for current requirements shall be invested in government securities and/or deposited in government banks.
- Administrative costs shall not exceed 1% of the previous year's Fund assets.
- Appropriations shall be released quarterly in four equal installments.
- The amount needed for implementation shall be included in the General Appropriations Bill.
Audit, Reporting, and Supervision (Sections 9-11):
- The Chairman of the Commission on Audit shall act as the auditor of the Fund.
- The administering agencies shall submit annual and quarterly detailed reports to Congress, including a list of beneficiaries.
- Particular aspects of the Fund's administration may be subject to supervision, visitation, or verification by designated government agencies.
Repealing Clause and Effectivity (Sections 12-13):
- Any conflicting provisions of law, decree, executive order, rule, or regulation shall be repealed, amended, or modified.
- The Act shall take effect upon its approval and publication in at least two national newspapers of general circulation.
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AN ACT CREATING THE ABOT-KAYA PABAHAY FUND
Republic Act No. 6846
•January 24, 1990
Republic of the Philippines
Congress of the Philippines
Metro Manila
Eighth Congress
Republic Act No. 6846             January 24, 1990
AN ACT CREATING THE ABOT-KAYA PABAHAY FUND, OTHERWISE KNOWN AS THE SOCIAL HOUSING SUPPORT FUND ACT, AND FOR OTHER PURPOSES
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.
Section 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.
Section 3. Fund System. – To carry out the purpose of this Act, there is hereby created the Abot–Kaya Pabahay Fund, hereafter referred to as...
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