Housing Loan Agreement (Philippines)
HOUSING LOAN AGREEMENT
Civil Code of the Philippines (RA 386, Articles 2124–2131) | Property Registration Decree (PD 1529) | HDMF Law (RA 9679)
This Housing Loan Agreement ("Agreement") is entered into this [Agreement Date] by and between:
LENDER: [Lender Name], with address at [Lender Address] (hereinafter, the "Lender"); AND
BORROWER: [Borrower Name], residing at [Borrower Address], TIN: [Borrower TIN], Pag-IBIG ID: [Pag-IBIG ID] (hereinafter, the "Borrower").
1. PROPERTY DESCRIPTION
1.1 The property subject to this Agreement and the real estate mortgage herein constituted is described as follows: [Property Description], covered by [TCT/CCT Number].
1.2 Loan Purpose: [Loan Purpose].
2. LOAN AMOUNT AND AMORTIZATION
2.1 Principal Loan Amount: [Loan Amount].
2.2 Annual Interest Rate: [Interest Rate]. Loan Term: [Loan Term] years. Monthly Amortization: [Monthly Amortization].
2.3 The first monthly amortization is due on [First Payment Date] and on the same day of each succeeding month until the Loan is fully paid.
2.4 Late Payment Penalty: [Penalty Rate].
3. REAL ESTATE MORTGAGE
3.1 As security for the Loan, the Borrower hereby constitutes a real estate mortgage over the property described in Section 1 in favor of the Lender under Article 2124 of the Civil Code of the Philippines. The Borrower warrants that the property is free from all liens and encumbrances except this mortgage.
3.2 The Borrower undertakes to execute a separate Deed of Real Estate Mortgage for registration with the Register of Deeds under Presidential Decree No. 1529. Documentary stamp tax under NIRC Section 195 shall be paid before registration.
3.3 The Borrower shall not sell, transfer, assign, or further mortgage the property without the Lender's prior written consent while this mortgage is subsisting.
4. INSURANCE AND TAXES
4.1 Insurance: The Borrower shall maintain [Insurance Requirement] throughout the term of this Agreement.
4.2 Real Property Tax: The Borrower shall pay all real property taxes on the mortgaged property when due under the Local Government Code (RA 7160) to prevent tax delinquency sale.
5. DEFAULT AND FORECLOSURE
5.1 The Borrower shall be in default upon failure to pay any amortization when due, failure to maintain insurance, or tax delinquency on the mortgaged property. Upon default, the Lender may declare the outstanding balance immediately due and payable.
5.2 The Lender may foreclose the real estate mortgage extrajudicially under Act No. 3135 (as amended by Act No. 4118) or judicially before the Regional Trial Court. The Borrower has the right of redemption within 1 year from the date of foreclosure sale under applicable law.
5.3 Maceda Law (RA 6552): If this Agreement constitutes an installment sale of residential property, the Borrower is entitled to the rights and protections under the Realty Installment Buyer Protection Act (RA 6552), including grace periods and refund rights upon cancellation.
6. GOVERNING LAW
6.1 This Agreement is governed by Philippine law including the Civil Code (RA 386), PD 1529, and RA 9679. Disputes shall be resolved before the courts of [Venue].
IN WITNESS WHEREOF, the parties have signed this Housing Loan Agreement on the date first written above.
[Lender Name]
Lender (Authorized Representative)
[Borrower Name]
Borrower
Lender (Authorized Representative)
________________
Signature
Borrower
________________
Signature
What Is a Housing Loan Agreement (Philippines)?
A Housing Loan Agreement in the Philippines sets out the conditions on which money is lent, including the rate of interest, any security taken and what happens on default.
Housing loans in the Philippines are provided through three main channels: (1) government-backed financing through the Home Development Mutual Fund (Pag-IBIG Fund) under Republic Act No. 9679 (HDMF Law of 2009), which offers the Housing Loan Program with rates as low as 5.75% per annum for qualified members; (2) Social Security System (SSS) housing loans under RA 11199 for private sector members; and (3) commercial bank mortgage loans regulated by the Bangko Sentral ng Pilipinas (BSP) under RA 8791. Private housing loan agreements between individuals follow the Civil Code and the General Banking Law framework.
The real estate mortgage (REM) created under a Housing Loan Agreement must be constituted in a public instrument (notarized document) under Article 2125 of the Civil Code and registered with the Register of Deeds of the province or city where the property is located under Presidential Decree No. 1529 (Property Registration Decree). An unregistered real estate mortgage is valid between the parties but cannot be enforced against innocent purchasers for value who acquire the property without notice of the encumbrance.
Transfer taxes and registration fees apply when registering a housing loan mortgage. Documentary stamp tax under Section 195 of the National Internal Revenue Code (NIRC, RA 8424 as amended by TRAIN Law RA 10963) applies to real estate mortgages at PHP 20.00 for the first PHP 5,000 of the mortgage amount and PHP 10.00 for every additional PHP 5,000 or fraction thereof. Registration fees with the Register of Deeds are computed based on the Land Registration Authority (LRA) fee schedule.
For socialized and low-cost housing, the National Home Mortgage Finance Corporation (NHMFC) and the Social Housing Finance Corporation (SHFC) — both government-owned and controlled corporations — offer secondary mortgage market facilities and housing microfinance programs. The Housing and Urban Development Coordinating Council (HUDCC) sets price ceilings for socialized and low-cost housing eligible for government financing programs under Republic Act No. 7279 (Urban Development and Housing Act of 1992).
The legal framework governing the Housing Loan Agreement (Philippines) in Philippines draws on several key statutes and regulatory bodies. Under Philippine law, the Civil Code of the Philippines (Republic Act No. 386) governs contractual obligations. The Revised Corporation Code (Republic Act No. 11232) regulates corporate entities through the Securities and Exchange Commission (SEC). The Labor Code of the Philippines (Presidential Decree No. 442) and Department of Labor and Employment (DOLE) govern employment matters. The Data Privacy Act of 2012 (Republic Act No. 10173) and the National Privacy Commission (NPC) protect personal data. The Bureau of Internal Revenue (BIR) administers tax obligations under the National Internal Revenue Code. Parties executing a Housing Loan Agreement (Philippines) in Philippines should confirm the document reflects current law, including any amendments enacted since the original drafting date. The Property Registration Decree (PD 1529) sets the foundational requirements.
When Do You Need a Housing Loan Agreement (Philippines)?
A Housing Loan Agreement in the Philippines is needed whenever real property is purchased or improved with borrowed funds and the parties want to document the loan terms and mortgage security in a form registrable with the Register of Deeds.
A Housing Loan Agreement is needed when a buyer purchases a house and lot or condominium unit with bank financing. The bank requires a signed Housing Loan Agreement and Real Estate Mortgage before releasing proceeds to the seller or developer. The mortgage is annotated on the Transfer Certificate of Title (TCT) or Condominium Certificate of Title (CCT) as an encumbrance at the Register of Deeds.
A Housing Loan Agreement is needed when a Pag-IBIG Fund member applies for a housing loan under the Pag-IBIG Housing Loan Program. Pag-IBIG requires execution of the Housing Loan Agreement together with a Real Estate Mortgage and Assignment of Insurance Proceeds before loan release, pursuant to Pag-IBIG Fund Circular No. 460 (2022) and its housing loan guidelines.
A Housing Loan Agreement is needed when a private individual lends money to another for the purchase or construction of a house, and the lender wants to register a real estate mortgage over the property as security. Without a registered mortgage, the lender's security interest is extinguishable by a subsequent buyer of the property without notice.
A Housing Loan Agreement is needed when a real estate developer offers in-house financing to a buyer of a house and lot or condominium unit. Republic Act No. 6552 (Maceda Law, 1972) governs installment sales of real property on installment — after the buyer has paid at least 2 years of installments, the Maceda Law grants the buyer a 60-day grace period to pay overdue installments and the right to a refund of 50% of total payments on cancellation.
A Housing Loan Agreement is needed when computing taxes and fees payable to the Bureau of Internal Revenue (BIR) and the Register of Deeds. The agreement amount determines the documentary stamp tax base under NIRC Section 195 and the Land Registration Authority registration fee.
What to Include in Your Housing Loan Agreement (Philippines)
A valid Housing Loan Agreement in the Philippines must contain the following elements to comply with the Civil Code, the Property Registration Decree, and applicable BIR and Pag-IBIG requirements.
Property Description: Complete technical description of the mortgaged property — lot number, block number, Transfer Certificate of Title (TCT) or Condominium Certificate of Title (CCT) number, area in square meters, and location by barangay, city or municipality, and province — as it appears on the title registered with the Register of Deeds. An inaccurate property description may invalidate the mortgage registration under PD 1529.
Loan Amount and Disbursement: The principal loan amount in Philippine pesos (PHP ₱), the purpose of the loan (purchase, construction, renovation), the mode of disbursement (directly to seller, developer, or contractor; or to borrower for self-construction), and the disbursement schedule for construction loans released in tranches.
Interest Rate and Amortization: The annual interest rate expressed as a percentage per annum, whether fixed or floating (and the repricing schedule for floating rates), the monthly amortization amount, the loan term in months or years, and the total amount payable. BSP Circular No. 799 (2013) sets the legal rate at 6% per annum for housing loans without a written interest stipulation.
Real Estate Mortgage Provisions: A clause creating a real estate mortgage over the property in favor of the lender under Article 2124 of the Civil Code, an undertaking to execute a separate Deed of Real Estate Mortgage for registration with the Register of Deeds, and a prohibition on selling, transferring, or further mortgaging the property without the lender's prior written consent.
Insurance and Tax Obligations: A clause requiring the borrower to maintain fire and allied perils insurance on the property with the lender as beneficiary/mortgagee, and an obligation on the borrower to pay all real property taxes under RA 7160 (Local Government Code) to prevent tax delinquency sale that would impair the mortgage security.
Default and Foreclosure: Events of default (non-payment of amortization, failure to insure, tax delinquency, unauthorized transfer), the grace period, and the lender's right to extrajudicial foreclosure under Act No. 3135 (as amended by Act No. 4118) — which allows the mortgagee to foreclose by public auction upon default with notice requirements — or judicial foreclosure before the Regional Trial Court.
Maceda Law Disclosure (RA 6552): For installment sales of residential property, a disclosure of the buyer-borrower's rights under RA 6552: the right to a 60-day grace period after paying 2 or more years of installments, the right to a refund on cancellation, and the right to sell or assign the installment contract. The forms-legal.com Housing Loan Agreement (Philippines) template covers the mandatory elements under Property Registration Decree (PD 1529).
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title = {Housing Loan Agreement (Philippines) (Philippines)},
year = {2026},
howpublished = {\url{https://forms-legal.com/philippines/real-estate/property/housing-loan-agreement-philippines}},
note = {Free legal document template. Based on Property Registration Decree (PD 1529)}
}Frequently Asked Questions
A Pag-IBIG (HDMF) housing loan and a bank housing loan in the Philippines differ primarily in eligibility, interest rates, and loan ceiling. Pag-IBIG Fund, established under Republic Act No. 9679 (HDMF Law of 2009), offers housing loans exclusively to active Pag-IBIG members who have made at least 24 monthly contributions. The maximum loanable amount under the Pag-IBIG Housing Loan Program (Circular No. 460, 2022) is PHP 6,000,000.00, with interest rates starting at 5.75% per annum for a 1-year fixed period. Pag-IBIG loans have a maximum term of 30 years. Bank housing loans (from BSP-regulated commercial or thrift banks under RA 8791) are available to non-members and may offer higher loan amounts — typically up to 80% of appraised value — but with market-driven interest rates currently ranging from 6.5% to 10% per annum. Banks generally have faster processing than Pag-IBIG but higher rates. Both types require a Real Estate Mortgage registered with the Register of Deeds and fire insurance with the lender as loss payee.
A real estate mortgage in the Philippines is registered with the Register of Deeds of the city or province where the property is located, following these steps under Presidential Decree No. 1529 (Property Registration Decree): (1) Execute the Deed of Real Estate Mortgage in a public instrument (notarized before a notary public); (2) Pay documentary stamp tax to the Bureau of Internal Revenue (BIR) using BIR Form 2000 within 5 days after the close of the month of execution — DST is PHP 20 for the first PHP 5,000 of mortgage amount and PHP 10 per additional PHP 5,000 under NIRC Section 195; (3) Obtain a BIR Certificate Authorizing Registration (CAR) or BIR stamp on the DST payment; (4) File the notarized Deed of Real Estate Mortgage with the Register of Deeds together with the owner's duplicate Transfer Certificate of Title (TCT) and pay the Land Registration Authority (LRA) registration fee; (5) The Register of Deeds annotates the mortgage as an encumbrance on the TCT and issues the title back with the annotation. The annotation serves as constructive notice to all third parties of the mortgage lien.
The Maceda Law (Republic Act No. 6552, 1972) is the Realty Installment Buyer Protection Act of the Philippines that protects buyers of residential real property on installment from arbitrary cancellation of their contracts. The law applies to all sales or financing of real estate on installment payments, except industrial lots, commercial buildings, and sales to tenants under agrarian reform. Under Section 3 of RA 6552, a buyer who has paid at least 2 years of installments is entitled to: (1) a grace period of 1 month for every year of paid installments to pay overdue amounts without additional interest; (2) if the contract is cancelled after this grace period, a refund of 50% of total payments made, plus 5% for every year beyond 5 years up to a maximum of 90%; (3) the right to sell or assign the installment contract to another buyer; and (4) the right to pay in advance. Under Section 4, a buyer who has paid less than 2 years of installments is entitled to a grace period of 60 days from the date the installment became due. The Maceda Law rights cannot be waived by the buyer in advance and any such waiver is void.
A housing loan in the Philippines can be foreclosed without a court order through extrajudicial foreclosure under Act No. 3135 (An Act to Regulate the Sale of Property Under Special Powers Inserted in or Annexed to Real Estate Mortgages, as amended by Act No. 4118). Extrajudicial foreclosure is available only if the Real Estate Mortgage contains a Special Power of Attorney (SPA) or a clause authorizing the mortgagee to foreclose without court proceedings upon default. The procedure under Act No. 3135 requires: (1) posting of notices of sale in 3 conspicuous public places in the municipality for at least 20 days; (2) publication in a newspaper of general circulation in the province once a week for 3 consecutive weeks; and (3) public auction sale at least 30 days after notice. The mortgagor (borrower) has a 1-year right of redemption after the auction sale date under Section 47 of RA 8791 for bank-mortgagors, and under Act No. 3135 for non-bank mortgagees, to repurchase the property by paying the auction price plus interest and costs.
Several taxes and fees apply to a housing loan mortgage transaction in the Philippines. Documentary Stamp Tax (DST) under Section 195 of the NIRC (as amended by TRAIN Law RA 10963) applies to the Deed of Real Estate Mortgage at PHP 20 for the first PHP 5,000 of the secured amount and PHP 10 for every additional PHP 5,000 or fraction thereof — for example, a PHP 3,000,000 mortgage bears DST of PHP 6,000. DST is payable within 5 days after the close of the month of execution through BIR Form 2000. Registration fees with the Register of Deeds are computed based on the LRA Registration Fee Schedule (LRA Circular No. 01-2010 as updated), approximately PHP 8,000–15,000 for a PHP 3,000,000 mortgage. Notarial fees for the Deed of Real Estate Mortgage are regulated by the 2004 Rules on Notarial Practice as amended. For Pag-IBIG loans, the Pag-IBIG Fund partially subsidizes registration costs for socialized housing borrowers. Annual real property tax (RPT) on the mortgaged property remains the borrower's obligation under the Local Government Code (RA 7160), at 1% of assessed value for Metro Manila cities.
This template is provided for informational purposes only and does not constitute legal advice. Laws vary by jurisdiction and change over time. Consult a qualified attorney for advice specific to your situation.Full disclaimer
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