Manila: The House of Representatives on Wednesday approved on third and final reading a measure seeking to establish a socialized and low-cost housing loan restructuring and condonation program.

According to Philippines News Agency, with 178 affirmative votes, three negative votes, and zero abstentions, the chamber approved House Bill No. 11202. The bill aims to provide financial relief to beneficiaries of the National Housing Authority (NHA) and Social Housing Finance Corporation by condoning interests and unpaid penalties related to unpaid housing amortizations.

San Jose Del Monte City Rep. Florida Robes, author of the bill, noted the low occupancy rate in government housing programs is largely due to beneficiaries’ inability to pay monthly amortizations and association dues. This financial strain has led many beneficiaries to sell their rights or lease their units to third parties.

Robes further explained that beneficiaries sometimes use their units as collateral for unregulated private and personal loans, which are influenced by the Bangko Sentral ng Pilipinas. This practice gives creditors the unilateral right to transfer the units to their possession, undermining the purpose of government housing programs and NHA initiatives to provide affordable housing for underprivileged and marginalized Filipino citizens.

The measure seeks to strengthen NHA’s mandate by implementing adaptive strategies to provide quality and affordable homes. Key provisions include condoning unpaid interests and penalties on delinquent housing loans, restructuring loan terms to extend payment periods and lower monthly amortizations, and providing incentives for borrowers who consistently pay on time.

The bill also permits legal heirs and successors-in-interest to assume payment of outstanding housing loans in cases of permanent physical incapacity of the borrower. In instances of the borrower’s death, the proceeds of the Mortgage Redemption Insurance will be fully applied.

However, the bill excludes certain accounts from its coverage. These exclusions involve housing units with no initial payments, units abandoned for more than one year from the date of delinquency, units occupied by third parties other than the original beneficiaries or their legal heirs, and foreclosed properties.