Own A Philippine Home Loan
About The Program
The program is open to all Filipinos and non-Filipinos residing and working in the U.S. who are interested in purchasing residential real estate in the Philippines. Borrowers may avail of only one loan under the program.
Properties that can be acquired under the program are a lot, house & lot, condominiums, townhouses or rowhouses. Determination of acceptability of properties eligible for financing under the program shall be based on the Inspection & Appraisal Report (IAR) of the Credit Investigation and Appraisal Division (CIAD).
Interest rates are variable at 3% over Wall Street Journal Prime Rate and adjust every time such rate changes. Proceeds of the loan shall be released lump sum in U.S. Dollars or in Philippine Pesos (converted at the Bank’s prevailing buying rate for telegraphic transfers).
The loan will be collateralized by a Standby Letter of Credit (L/C) to be issued by PNB Manila. The L/C, in turn, will be secured by a real estate mortgage on the property to be acquired.
Other Loan Purposes Covered by the Program
1. Construction of a house on a lot owned by the borrower or another person (usually a relative) who is willing to mortgage the lot in favor of PNB.
2. Improvements on an existing house owned by the borrower.
3. Refinancing of a Philippine Peso home mortgage loan.
Who Can Borrow
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• Filipinos residing and working abroad who have maintained their Filipino citizenship
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• Natural – born Filipinos residing and working in the U.S. who have lost their Filipino citizenship (limited to a maximum lot area of 1,000 square meters)
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• U. S. citizens and nationals of foreign countries who are non-Filipinos and residing in the U.S. (limited to the acquisition of condominium units only where the common areas are owned by the Condominium Corporation, i.e. alien interest in such corporation should not exceed 40% as required by Philippine law)
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How Much You Can Borrow
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The loan for purchase of lot with proposed/ongoing construction/newly-built house, townhouse or rowhouse and condominium unit will be up to 80% of verified selling price of the property or as per Reservation Agreement/Contract to Sell entered into between the borrower and the seller/real estate developer if the property is acquired from a PNB-accredited project of a PNB-accredited developer or 80% of the appraised value (AV) for non-accredited projects.
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The loan for house construction will be up to a maximum of 80% of the AV of the lot and house to be constructed and for house improvement will be up to a maximum of 80% of the AV of the lot and of the bill of materials of the house to be improved/renovated.
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The loan for the purchase of lot and existing improvements which are no longer brand new (i.e. house, townhouse or rowhouse and condominium unit) will be up to a maximum of 80% of the AV of the real estate property to be acquired.
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• The loan for the purchase of lot will be up to a maximum of 60% of the verified selling price of the property or as per Reservation Agreement/Contract to Sell entered into between the borrower and the seller/real estate developer if the property is acquired from a PNB-accredited project of a PNB-accredited developer or 60% of the AV for non-accredited projects.
• The loan for refinancing/take-out will be up to a maximum of 80% of the AV of the property to be financed or the outstanding principal balance, whichever is lower.
Repayment Terms
- • Maximum of 20 years for a house and lot; 10 years for purchase of a lot only.
- • Repayment of your loan shall be in US dollars. Amount of monthly amortization shall be adjusted upward or downward depending on the interest rate charged for a particular interest period.
- Payments commence one month after a lump sum loan release (for lot or house and lot package) or one month after the initial loan release for house construction. Monthly amortization for house construction will increase as staggered releases are made.
- • Monthly amortization payments will be made against a monthly statement of account which shall be sent approximately 2 weeks prior to each monthly due date.
Life Insurance
- The life insurance requirement may be waived provided that the borrower’s equity is at least 20%. However, an optional life insurance policy equivalent to at least the amount of loan (based on diminishing balance) may be secured by the principal borrower from a PNB affiliate, Beneficial-PNB Life Insurance Co., Inc.
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How To Apply
1. Send a complete application package to PNB together with supporting documents and fees. This will include:
- • Loan application which includes your Personal Financial Statement, Collateral Appraisal/Reappraisal Authorization, Credit and Financial Information Authorization and Declaration of Purpose Statement (for downloading from this website)
- • Latest 2 years Federal Income Tax Returns with the corresponding W-2
- • Latest two (2) months payslip
- • Latest two (2) months Bank statements
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NOTE: for self-employed applicants, 3 years income tax returns evidencing consistent profits will be required.
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• In order to obtain a proper appraisal of the property, the following items should be obtained & forwarded to PNB:
- » Transfer/Condominium Certificate of Title (may still be in the name of seller)
- » Lot Plan certified by Geodetic Engineer
- » Location/Vicinity Map
- » Realty Tax Declaration
- » Reservation Agreement, Contract To Sell or Conditional Deed of Sale (if borrower has tendered a down payment)
- » For house construction, complete architects plan specification of the proposed house/project and detailed cost estimate e of the proposed house/project with detailed quantity take-off of each structure.
2. Upon receipt of the complete application package, a formal appraisal report will be requested through PNB Manila and PNB Los Angeles shall evaluate the credit worthiness of the loan applicant. Analysis will be conducted in accordance with existing credit standards, taking into particular consideration the applicant’s character, capacity to pay and stability of residence/employment.
3. Once the loan is approved by Head Office, the decision will be conveyed to the applicant in writing.
4. Upon final approval, legal documentation will be prepared. Loan related documents will be signed by the borrower in the U.S. Real estate mortgage and L/C related documents may be signed by the borrower in the U.S. or, an “Attorney-in-Fact” (AIF) in the Philippines. The mortgage and L/C related documents or the Special Power of Attorney appointing an AIF, will require authentication by the Philippine Consul.
5. Upon receipt by PNB Manila of all signed documents, the real estate mortgage is registered and annotated on the title (already in the name of the buyer), the standby L/C is issued and loan proceeds are released to the seller. Real estate property titles are kept at PNB Manila for safekeeping and copies are forwarded to PNB Los Angeles for the branch and buyer’s files.
A 1% origination fee will also be charged upon execution of all related documents prior to the release of the loan proceeds.
Past Dues / Late Payments
All late payments (10 days or more after due date) shall be subject to a late payment charge equal to 5% of the late installment.
The Bank will attempt to collect on delinquencies for a maximum of 90 days during which a sequence of demand letters will be sent to the borrower. If no attempt is made by the borrower to contact the Bank and settle outstanding obligations, on the 90th day the Bank will draw against the Standby Letter of Credit collateralizing the loan. At this point the loan is transferred to the Philippines and booked as a 10 DAY PESO DEMAND LOAN subject to Philippine Peso rates and Peso Loan procedures. If still unpaid within the 10 day Peso Loan period, immediate foreclosure on the property will be implemented.
Estimated Monthly Payment Required
(Per $1,000.00)
APR = Annual Percentage Rate for a $60,000 loan
Annual Percentage Rate (APR)
The Annual Percentage Rate (APR) is the percentage relationship of the total finance charges to the amount of your loan. It is a measure of the cost of credit, expressed as a yearly rate. It includes interest as well as other finance charges such as points, appraisal fee, Letter of Credit (LC) issuance fee, LC wire fee and notarial fee.
Example: Borrower’s loan is $60,000.00, payable in 10 years, and an Adjustable Rate (AR) of 7.75%. Prepaid finance charges are the following: Points - $600.00, Appraisal fee - $125.00, LC Issuance fee - $100.00, LC Wire fee - $40.00 and Notarial fee is $10.00. Annual Percentage Rate for this loan is 8.093%
Example: Borrower’s loan is $60,000.00, payable in 20 years, and an AR of 7.75%. Prepaid finance charges are the following: Points - $600.00, Appraisal fee - $125.00, LC Issuance fee - $100.00, LC Wire fee - $40.00 and Notarial fee is $10.00. Annual Percentage Rate for this loan is 7.950%.
Frequently Asked Questions
If I have already purchased a house and lot and currently paying a Philippine Peso mortgage in the Philippines, can I still avail of the “Own a Philippine Home Loan” ?
- Yes. PNB’s Own a Philippine Home Loan” can be used to refinance existing Peso mortgages. Refinancing through PNB’s program will usually result in a lower interest rate and lower monthly amortization's.
- We can refinance your existing peso mortgage loans up to 100% of the outstanding balance of the loan provided that the outstanding balance does not exceed 80% of the appraised value.
What if I am a Filipino citizen but my husband/wife is not? Are we eligible to purchase property with your loan program?
- Yes. However, under Section 7, Article XII of the Philippine Constitution, foreigners may not acquire private land. Therefore, title to the property will be in the name of the Filipino spouse. For condominium units, the certificate of title may be in the names of both Filipino and foreigner spouses.
We want the house and lot to be in the name of our mother in the Philippines but we, her children, wish to borrow and pay the loan here in the U.S. Can we avail of your loan ?
- Yes. But your mother would have to sign the loan as a “Grantor of Collateral”. This means that although she is not a borrower on the loan and does not have to pay back the loan if her children default, she is authorizing the use of the property she owns as “collateral” and is fully aware of the risk of foreclosure on the property if her children do not repay the loan.
Is this loan open only to residents of the United States?
- Yes
What if I am a temporary worker in the U.S. on a temporary working visa (H1/J1), can I purchase property under your program ?
- The answer to this shall be determined on a case to case basis, depending on the prospective stability of U.S. employment, the current and future assets of the borrower and other factors. In general, this program was created for those Filipinos and foreigners who wish to buy Philippine real estate and are PERMANENTLY working in the U.S. It is this stable stream of future dollar income which the bank shall look to as its primary source of repayment on the loan.
What if I am a former Filipino and have now become an American, what kind of property may I purchase under your program?
- As a former Filipino citizen, you are entitled to purchase private real estate with a maximum of 1,000 square meters. Foreigners, on the other hand, or children of Filipino parents born in the U.S., are entitled only to purchase condominium properties wherein common areas are owned by the condominium corporation.
Click here to Download OPHL Application Form.
If you have further questions or concerns, please contact:
Sonny Casino
Direct Line: (212) 790-9610
Email: casinonh@pnbnewyork.com