May 17, 1995

IMPLEMENTING RULES AND REGULATIONS OF REPUBLIC ACT 7835 (COMPREHENSIVE AND INTEGRATED SHELTER FINANCING ACT OF 1994)

An Act providing for a Comprehensive and Integrated Shelter and Urban Development Financing Program by increasing and regularizing the yearly appropriation of the major components of the National Shelter Program, including the Abot-Kaya Pabahay Fund under Republic Act No. 6846, augmenting the authorized capital stock and paid-up capital of the National Home Mortgage Finance Corporation (NHMFC) and the Home Insurance and Guaranty Corporation (HIGC), identifying other sources of funding and appropriating funds for the purposes; CaESTA

WHEREAS, it is hereby declared a policy of the State to undertake, in cooperation with the private sector, a continuing program of urban land reform and housing which will make available, at affordable cost, decent housing and basic services to underprivileged and homeless citizens in urban centers and resettlement areas;

WHEREAS, in recognition of the role of housing as catalyst of economic growth and development, it is hereby declared a state policy to strengthen, promote and support the component activities of housing production and finance;

WHEREAS, the Housing and Urban Development Coordinating Council is mandated by Section 15 of RA 7835 to promulgate the implementing rules and regulations of the said law; DEcITS

For and in consideration of the foregoing premises, the Housing and Urban Development Coordinating Council hereby prescribes the following rules and regulations in the implementation of RA 7835.

RULE I

Statement of Objectives

1.1 Ensure continuous funding support to vigorously implement the government's programs for urban and rural housing, resettlement, the development of sites and services and the renewal of blighted areas;

1.2 Enhance the capability of low-income groups to acquire decent and low-cost housing units through the introduction of support mechanisms and facilities which shall render affordable such acquisitions;

1.3 Provide for a strong and sustainable housing finance program with complementary support systems, which will pump prime, build up and strengthen available sources of cheap and long-term capital;

1.4 Increase the public and private sectors' participation in the investment of their funds into the mainstream of housing finance for developmental and end-user financing requirements of the National Shelter Program;

1.5 Enjoin the active participation of the local government units in the socialized housing programs through adequate measures for housing development in their respective areas;

1.6 Strengthen the capital base and optimize the resources of the National Government and the government's housing institutions towards a balanced, coordinated and integrated shelter delivery system;

1.7 Serve the housing requirement of all the underprivileged and those gainfully employed but are not members of any funding agencies such as Government Service Insurance System, Social Security System and Home Development Mutual Fund;

1.8 Focus the government's full financial, technical and manpower resources in addressing the shelter needs of the lowest thirty percent (30%) of the population and with the private sector's cooperation, the higher socio-economic percentiles of our country's population. TSHEIc

RULE II

Definition of Terms

2.1 ABOT KAYA PABAHAY FUND refers to the fund established under RA 6846 as amended by RA 7835.

The Fund shall be used exclusively for the objectives of enhancing affordability of low-cost housing by low-income families, providing developmental financing for low-cost housing project and eliminating risks for the funding agencies involved in housing, namely: the Social Security System (SSS),the Government Service Insurance System (GSIS) and the Home Development Mutual Fund (HDMF),or their accredited financial institutions.

The Fund shall be devoted to provide amortization support, expedite the development of land into suitable sites for housing by providing developmental financing to developers of low-cost housing projects, and establish a strong guarantee system to ensure viable cashflow for the funding agencies involved in housing (RA 6846).

The Fund shall also allocate funds for liquidity and interest/subsidy support to the secondary market operation of National Home Mortgage Finance Corporation to serve as an alternative mechanism for sourcing housing funds, tapping in the process private and public long-term funds (RA 7835).

2.2 ACT refers to the Comprehensive and Integrated Shelter Financing Act of 1994.

2.3 AFFORDABILITY refers to the paying capacity of housing beneficiaries to purchase or lease a serviced lot, house and lot package or housing unit under any of the programs outlined in RA 7835, taking into consideration the financial resources/expenditures of the beneficiaries on minimum basic needs in relation to cost of housing development and viability of financing schemes.

2.4 ALIENABLE PUBLIC LANDS refer to any of those which are not yet covered by any claim of ownership or have been allocated or acquired (IRR RA 7279, Secs. 9-12).

2.5 BENEFICIARY, for purposes of these Rules, refers to individual/entity who is eligible for housing assistance under the National Shelter Program.

2.6 COMMUNITY MORTGAGE PROGRAM refers to the mortgage financing program of the NATIONAL HOME MORTGAGE FINANCING CORPORATION (NHMFC) which assists legally organized associations of underprivileged and homeless citizens to purchase and develop a tract of land under the concept of community ownership. Financing at very low interest rate is granted to beneficiaries to purchase the land as a whole and to improve the sites (RA 7279 and RA 7835).

2.7 COMPLETED HOUSING entails the construction of complete house and lot packages.

2.8 CONGRESSIONAL DISTRICTS refer to those areas that shall comprise, as far as practicable, contiguous compact, and adjacent territory with a population of at least two hundred fifty thousand as defined in Article VI, Section 5 of the 1987 Philippine Constitution. By virtue of apportioning the seats of the House of Representatives of the Congress of the Philippines, all cities and provinces have been subdivided into congressional districts with each district entitled to one seat in the House of Representatives.

2.9 COST RECOVERABLE PROGRAMS refer to programs which involve the development of sites with housing component and the provision of serviced homelots through joint venture schemes with the private sector or local government units. Program beneficiaries shall fully repay on installment basis the financial assistance granted for the purchase of the housing units (RA 7835, Sec. 4 (d)). ISTDAH

2.10 DEMOLITION refers to the dismantling by the LGU, or any legally authorized agency of government or by the affected families of all structures within the premises subject for clearing (IRR RA 7279, Sec. 44).

2.11 EVICTION refers to the removal of persons and their belongings from a subject building/structure or area, or both in accordance with law (IRR RA 7279, Sec. 44).

2.12 HOME DEVELOPMENT MUTUAL FUND herein referred to as HDMF or Pag-IBIG Fund, is the agency created by virtue of Pres. Decree No. 35, whose principal function is to administer provident fund contributions of its members (Executive Order 90).

2.13 HOME INSURANCE AND GUARANTY CORPORATION herein referred to as HIGC is the agency mandated to assist developers to undertake low-and-middle income mass housing production and encourage private institutional funds and commercial lenders to finance such housing development and long-term mortgage through a viable system of guarantees, loan insurance and other fiscal incentives (Exec. Order No. 90).

2.14 HOUSING AND LAND USE REGULATORY BOARD hereinafter referred to as HLURB is the agency created by Executive Order 648 as the sole regulatory body for housing and land development (Exec. Order No. 90). CScaDH

2.15 HOUSING AND URBAN DEVELOPMENT COORDINATING COUNCIL herein referred to as HUDCC, is the policy-making and coordinating body on housing and urban development. (Executive Order 90).

2.16 INTEREST SUBSIDY for purposes of these Rules, refers to the component of the Abot-Kaya Pabahay Fund that subsidizes/answers for the differential in market interest rates and the mortgage yields inclusive of all other incidental costs, service charges, fees and taxes in the issuance/sale by NHMFC of bonds, securities, notes, debentures and other conveyances and financial instruments.

2.17 LAND BANKING refers to the acquisition of land at values based on existing use in advance of actual need to promote planned development and socialized housing programs (RA 7279).

2.18 LIQUIDITY SUPPORT, for purposes of these Rules, refers to the component of the Abot-Kaya Pabahay Fund which is intended to support mortgage trading operations of NHMFC, other than interest subsidy, including but not limited to pretermination, liquidity enhancement of the mortgage pool securitizations and other assets, as well as for the temporary liquidity requirements during the period of redemption of bonds and other issuances, and re-issuance backed by the same pool of mortgages, securitization and other assets.

2.19 LOCAL HOUSING refers to cost recoverable socialized housing projects to be implemented by the NHA in selected urban and urbanizable areas in all congressional districts (RA 7835, Section 4e).

2.20 MEDIUM RISE PRIVATE HOUSING for purposes of the Rules, refers to the construction of cost recoverable residential buildings in high density urban areas not less than 3 storeys or the maximum limits for walk-up medium-rise housing buildings in accordance with the National Building Code, BP 220 and other pertinent laws, by the private sector in collaboration with NHA for disposition through direct sale or lease.

2.21 MEDIUM RISE PUBLIC HOUSING for purposes of these Rules, refers to the construction of residential buildings in high density urban areas not less than 3 storeys or the maximum limits for walk-up medium-rise buildings in accordance with the National Building Code, BP 220 and other pertinent laws, to be leased to low income families and other beneficiaries defined under RA 7279. IcaEDC

2.22 NATIONAL HOUSING AUTHORITY, hereinafter referred to as the NHA, refers to the agency created by virtue of Presidential Decree No. 757 and is the sole government agency engaged in direct shelter production (Exec. Order No. 90).

2.23 NHA TRUST FUND refers to the Trust Fund created under section 5 of RA 7835 to be managed and administered by the NHA for the purpose of implementing programs mandated therein, specifically, Medium-Rise Public and Private Housing and Local Housing Programs.

2.24 NATIONAL HOME MORTGAGE FINANCE CORPORATION, hereinafter referred to as NHMFC, refers to agency created by virtue of the Presidential Decree No. 1267 and is mandated to be the major government home mortgage institution. It is also charged to develop a system that will attract private institutional funds into long term housing mortgages (Executive Order 90) and to develop and provide a secondary mortgage market system (P.D. 1267).

2.25 REPUBLIC ACT 7279 refers to the Urban Development and Housing Act or UDHA which provides a comprehensive and continuing urban development and housing program.

2.26 RESETTLEMENT PROGRAM refers to the program which shall involve land acquisition and site development by the NHA to generate serviced homelots for families displaced from sites earmarked for government infrastructure projects, those occupying danger areas such as waterways, esteros, railroad tracks and those qualified for relocation and resettlement assistance under RA 7279 (RA 7835, Section 4a.).

2.27 SECONDARY MORTGAGE MARKET SYSTEM refers to the system which entails purchase, acquisition, discounting or refinancing of loan and mortgage packages or participation therein. These instruments in turn are traded in the financial market through issuance/sale of bonds, promissory notes, debentures, conveyances and other financial instruments or participation therein, backed by the same pool of mortgages, securitizations and other assets. Funds generated therefrom are again plowed back into the mainstream of loan and mortgage trading. Development and provision for a Secondary Mortgage Market is the primary purpose of National Home Mortgage Finance Corporation under P.D. 1267.

2.28 SOCIALIZED HOUSING refers to housing programs and projects covering houses and lots or homelots, only undertaken by the government or the private sector for the underprivileged and homeless citizens which shall include sites and services development, long-term financing, liberalized terms on interest payments, and such other benefits in accordance with the provisions of RA 7279 (RA 7279). DEICaA

2.29 UNDERPRIVILEGED AND HOMELESS CITIZENS refers to the beneficiaries of RA 7279 and to individuals or families residing in urban and urbanizable areas, whose income or combined household income falls within the poverty threshold as defined by the National Economic and Development Authority (NEDA) and who do not own housing facilities. This shall include those who live in makeshift dwelling units and do not enjoy security of tenure (RA 7279).

2.30 UNIFIED HOME LENDING PROGRAM hereinafter referred to as UHLP, refers to the NHMFC program through which the respective housing programs of the Social Security System (SSS),Government Service Insurance System (GSIS) and HDMF/Pag-IBIG are integrated under NHMFC's administration. The UHLP uses funds from SSS, GSIS and HDMF for lending to their respective members through accredited financial institutions and subdivision developers nationwide.

RULE III

Coverage/Scope

This Implementing Rules and Regulations covers the following provisions of Republic Act 7835:

Section 4. National Shelter Program Implementation

a) Resettlement Program

b) Medium Rise Public and Private Housing

c) Community Mortgage Program

d) Cost Recoverable Program

e) Local Housing

Section 5. National Housing Authority Trust Fund

Section 6. Recapitilization of National Home Mortgage Finance Corporation

Section 7. Recapitilization of Home Insurance Guaranty Corporation

Section 8. Expanding the Scope and Usage of the Abot-Kaya Pabahay Fund

Section 9. Appropriations by the National Government

Section 10. Fund Sources

RULE IV

Resettlement Program

SECTION 4.1 Program Scope.—

4.1.a The Program shall involve land acquisition and site development by NHA to generate service homelots for families displaced from sites earmarked for government infrastructure projects, those occupying danger areas such as waterways, esteros, railroad tracks and those qualified for relocation and resettlement assistance under Republic Act 7279.

4.1.b The Program shall cover resettlement sites developed directly by the NHA and those that will be developed as joint undertaking with Local Government Units (LGUs),other government agencies and the private sector to include landowners, developers and non government organizations and community peoples organizations. CIHAED

4.1.c To sustain the Program, the NHA shall engage in land banking activities to ensure availability of land.

SECTION 4.2 Program Delivery Scheme.—

4.2.a The development of resettlement sites shall be undertaken by the NHA, on its own or jointly with LGU's other government agencies and the private sector.

4.2.a.1 NHA-Administered Resettlement Program

The development of resettlement sites for families displaced by the implementation of critical government social and economic programs and projects of national interest shall be undertaken directly by the NHA.

4.2.a.2 Resettlement Assistance Program for Local Government Units.

Pursuant to RA 7279, LGUs shall provide resettlement sites for families living in danger areas, those displaced by the government infrastructure projects and those qualified for resettlement assistance under RA 7279. The development resettlement sites by the LGUs shall be assisted by the NHA under its Resettlement Assistance Program for LGUs, and shall be implemented as joint undertakings of the LGU and NHA. The LGUs primary contribution shall be land while the NHA shall provide funds to cover the cost of land development. AHcDEI

4.2.a.3 Resettlement Program with Other Government Agencies and the Private Sector.

The development of resettlement sites under this scheme may be undertaken in response to the need for resettlement sites by other government agencies, by private landowners with properties which are illegally-occupied and by community people's organizations in depressed/blighted areas with no security of tenure or as compliance by private developers with the mandatory 20% subdivision development under Socialized Housing pursuant to RA 7279.

The NHA shall formulate specific guidelines to define areas of collaboration of all sectors involved in the development of resettlement sites under this scheme.

4.2.b The NHA shall embark on a nationwide Land Banking Program to build-up the land inventory required for the Resettlement Program.

SECTION 4.3 Operational Framework.—

4.3.a Site Location

4.3.a.1 Priority Selection Criteria. In the choice of the particular city or municipality where resettlement sites shall be developed, the following shall be considered:

* For NHA-Administered resettlement Projects.

– the availability of land found suitable for resettlement purposes; and cTECIA

– the willingness as well as the capability of the host LGU to assume project management and administration.

* For resettlement Assistance Program for LGUs priority shall be given to the following areas:

– The major urban centers of the country such as the regional growth centers cities and provincial capital towns with high housing need and high incidence of illegal settlements;

– Other urban and urbanizing centers in the particular province and/or congressional district where no government housing assistance has been extended.

4.3.a.2 The Site Selection Criteria prescribed under Section 6 of the guidelines for the Inventory and Identification of Lands and Sites for Socialized Housing of RA 7279 shall govern the selection of the specific site wherein a resettlement project shall be developed. CSHcDT

4.3.a.3 In the selection of resettlement sites, consultation with the affected families shall be undertaken in accordance with section 3 of the IRR of RA 7279 (Ensure the Observance of Proper and Humane Relocation and Resettlement Procedures).

4.3.b Land Acquisition.

4.3.b.1 For NHA-Administered Resettlement Projects, NHA shall directly purchase the land.

4.3.b.2 For the resettlement Assistance Program for LGUs. Land shall be contributed by the LGUs subject to the conditions prescribed under Section 4.3.a hereof. Where the land being contributed is a public land, the LGU shall secure the issuance of a Presidential Proclamation and a Special Patent. Under this scheme, the NHA may assist in the acquisition of lands in areas where the assistance requested by the LGUs is limited to the land acquisition and where the LGU shall undertake site development.

4.3.c Project Financing.

For land acquisition and site development, the NHA shall utilize subsidy funds released by the National Government pursuant to R.A. 7835. In addition to these funds, NHA may utilize contributions from LGUs, government agencies and private sector participating in the implementation of the resettlement Program.

4.3.d Cost Sharing

4.3.d.1 For NHA Directly Administered Resettlement Projects. NHA assumes all costs for land acquisition and site development.

4.3.d.2 For Resettlement Assistance Program for LGU's. Land or cost of land acquisition shall be provided by the LGU. The LGU may likewise contribute funds for the provision of utilities and community facilities, equipment and manpower for land development.

The NHA contribution shall be utilized for land development, to include: survey works, earthworks, roadworks, drainage/sewerage system, and sanitary/water/power facilities.

LGU shall assume the cost of maintenance and operations of the resettlement sites, utilizing funds recovered from beneficiaries or from allocations from the LGU annual budget.

4.3.e Site Development

4.3.e.1 Design standards shall conform with those set under BP 220 and other pertinent government regulations for resettlement site development.

4.3.e.2 The development of the project shall be undertaken through civil works/infrastructure contracts to be awarded through public bidding in accordance with pertinent provisions of PD 1594 "Prescribing Policies, Guidelines, Rules and Regulations for Government-Infrastructure Contract" and Implementing Rules and Regulations thereof, as amended.

* Under the NHA-Administered Projects, contracting shall be undertaken by NHA.

* Under the Resettlement Assistance Program to LGUs, contracting shall likewise be undertaken by the NHA. In cases, however, where the participating LGU has technical capability to undertake infrastructure development, site development may be undertaken by administration.

4.3.e.3 The end product shall be a serviced homelot. Housing construction shall be considered the equity of the beneficiaries. CHIEDS

4.3.e.4 Basic services and facilities shall be provided as prescribed under Section 21 of RA 7279.

4.3.f Disposition of Homelots.

4.3.f.1 Beneficiary Selection. The target beneficiaries of the Program shall include:

Urban poor families qualified for relocations and resettlement assistance under RA 7279;

– Persons or families occupying danger areas such as esteros, railroad tracks, garbage dumps, river banks, shorelines, waterways and other public places such as urban poor families qualified for relocations and resettlement assistance under RA 7279;

– Persons or families occupying danger areas such as esteros, railroad tracks, garbage dumps, river banks, shorelines, waterways and other public places such as sidewalks, roads, parks and playgrounds; DAHaTc

– Those affected by government infrastructure projects with available funding and are about to be implemented;

– Those subject of a court order for eviction and demolition.

* Qualified Socialized Housing Beneficiaries under RA 7279:

– Underprivileged and homeless citizens whose average monthly income or combined family income fall within the poverty threshold as defined by the National Economic and Development Authority (NEDA);

– Those who do not own any real property whether in the urban or rural areas and have not been beneficiaries of any government housing program except on leasehold or rental arrangement.

4.3.f.2 A multi-sectoral Beneficiary Selection Committee shall be organized for projects undertaken under the Resettlement Program. This Committee shall be composed of representatives from the different agencies and organizations involved in the planning and development of the resettlement site which shall include representative of the NHA, the LGU concerned, and other participating agencies or sectors. AcHaTE

4.3.f.3 Disposition of homelots shall be guided by the provisions under Section 12, Section 14 of RA 7279 and other pertinent legal issuances and local ordinances.

4.3.f.4 In the development of resettlement sites, mixed market land use may be allowed, wherein certain portions of the project site with commercial use potential may be classified as economic-residential lots. Prioritization in the disposition/award of these lots is as follows:

* First Priority: Beneficiaries of the Resettlement Site;

* Second Priority: Open Market.

4.3.g. Cost Recovery.

4.3.g.1 The cost of the project shall be recovered from the beneficiaries for the sustainability and maintenance of the project under terms and conditions to be prescribed by the NHA, and/or the participating LGU through the Local Sanggunian. The amount to be charged shall be guided by the affordability of the beneficiaries.

4.3.g.2 For economic lots, full cost recovery with positive rate of return shall be the basis for pricing.

4.3.g.3 All revenues generated from resettlement projects shall accrue to a Resettlement Fund to be administered by the LGU both for NHA-Administered Projects Resettlement Assistance Program for LGUs and shall be exclusively utilized for project maintenance and/or acquisition/development of new resettlement sites.

4.3.h Project Turn over.

4.3.h.1 The physical development of the project is deemed completed upon submission by the entity undertaking the development of a Project Accomplishment Report and the acceptance of the project by a joint NHA-LGU committee.

4.3.h.2 The project and its components shall be turned over to the concerned LGU in accordance with pertinent laws.

4.3.i Joint Undertakings for Resettlement Projects. Where the development of resettlement sites involve the participation of two or more parties, a Memorandum of Agreement defining the project's operational framework and the responsibilities/roles of all participating parties shall be executed.

SECTION 4.4 Role of Host Local Government Units.—

4.4.a Participate in the planning of the resettlement site;

4.4.b Accept the completed project from NHA to include the land, the completed land development and facilities, and lot disposition contracts;

4.4.c Create a full-time technical team responsible for project management and operations, to include the following: (1) cost recovery/collection and, (2) project maintenance;

4.4.d Deposit all revenues generated from the project in a Resettlement Fund to be managed by the LGU, which Fund shall be exclusively utilized for project maintenance and for acquisition and/or development of new resettlement sites.

SECTION 4.5 Role of Participating Local Government Units.—

4.5.a Provide the land, ensure that the property is free from liens and encumbrances, and undertake titling of all individual lots covered by the project;

4.5.b Provide additional funds if the funds provided by NHA are not adequate to complete the project;

4.5.c Ensure adequate consultation with the intended beneficiaries of the resettlement project;

4.5.d Create the Beneficiary Selection Committee of the project;

4.5.e Monitor, jointly with NHA, the implementation of land development/civil works contract;

4.5.f Ensure the provision of basic services and facilities, in coordination with concerned agencies;

4.5.g Upon completion of physical development, accept the completed development from NHA and maintain completed works;

4.5.h Undertake relocation of beneficiaries to the resettlement site;

4.5.i Undertake estate management functions, to include lot disposition, collection of fees from the identified beneficiaries of the project and related tenurial activities;

4.5.j Deposit all revenues generated from the project in a Resettlement Fund to be managed by LGU, which fund shall be exclusively utilized for project maintenance and for acquisition and/or development of new resettlement sites; TIaCHA

4.5.k Create a full-time technical team responsible for undertaking project operations and management;

4.5.l Establish a working Local Housing Board which shall oversee the implementation of the project as well as the development of a local housing program;

4.5.m Prevent the incursion of professional squatters and squatting syndicates in the resettlement site.

SECTION 4.6 Role of the NHA.—

4.6.a Provides funds from the subsidy support granted to the NHA by the National Government as its contribution to the project to cover the funding requirement for land development;

4.6.b Provides technical assistance in project planning and packaging, project implementation, beneficiary selection, relocation, estate management and other areas where assistance is requested by the LGU, other government agencies or the private sector;

4.6.c Prepares the subdivision development plans, detailed engineering drawings, technical specifications and cost estimates for land development; CSaHDT

4.6.d Undertakes award of civil works contract in accordance with PD 1594 and its Implementing Rules and Regulations, as amended, and ensure that implementation of said contract is in accordance with approved plans and specifications;

4.6.e Assists participating LGUs in the development of a local housing program;

4.6.f Undertakes project operations and management of NHA-Administered Resettlement Sites, to include the following: (1) site planning and land development, (2) beneficiary selection and relocation, (3) lot disposition, and, (4) project turnover.

SECTION 4.7 Role of the Community/People's Organizations.—

4.7.a Participate actively in selection/acquisition of the resettlement site and in the planning and development of the project;

4.7.b Undertake self-help cooperative housing and initiate/facilitate the provision of livelihood activities to their members;

4.7.c Assist the LGU in information dissemination, cost recovery and in the proper maintenance of the project;

4.7.d Assist the LGU in preventing the incursion of professional squatters and squatting syndicates within the Resettlement Project.

SECTION 4.8 Non Government Organizations (NGOs).—

Participating NGOs, given their areas of expertise, may undertake the following activities in the implementation of the resettlement project;

4.8.a Undertake community organizing and institution building;

4.8.b Provide or facilitate access to socio-economic services to the community;

4.8.c Undertake site planning and development;

4.8.d Participate in the consultation process, as requested by the community/people's organization;

4.8.e Monitor the development and operations of the resettlement site.

RULE V

Medium-Rise Private and Public Housing

SECTION 5.1 Program Scope.—

5.1.a The Medium-Rise Public and Private Housing entails the construction walk-up buildings as an in-city relocation alternative for low-income families and other beneficiaries as defined by RA 7279 residing in high density urban areas. The scheme minimizes economic displacement among intended beneficiaries and maximized the use of scarce high cost urban land available for socialized housing.

5.1.b The program shall be implemented in high density urban areas in the country over a period of five years or until the total program funds have been fully released.

5.1.c The Program shall have two components, namely: The Medium-Rise Public Housing and the Medium Rise Private Housing. The Program shall be implemented by the NHA with the participation of other government agencies, local government units and the private sector. Units generated under this Program shall be disposed either through outright sale or lease depending on the affordability of the beneficiaries.

SECTION 5.2 Operational Framework.—

5.2.a The Medium-Rise Public Housing shall be undertaken by the NHA with the participation of the Public Estates Authority (PEA). Local Government Units, Presidential Commission on the Urban Poor (PCUP) and other concerned government agencies. The Medium-Rise Public Housing is intended primarily as an in-city relocation alternative for families affected by relocation activities and qualified for assistance Under RA 7279. EHTIcD

5.2.b The Medium-Rise Private Housing shall be undertaken by the NHA with the private sector under a joint venture scheme or any other workable arrangements. The Medium Rise Private Housing is intended primarily to provide housing option to low-income families and to provide additional rental housing stock in high density urban areas. The Program provides opportunity to private landowners in these areas to utilize unproductive or marginal properties for housing proposes.

5.2.c The criteria for selection of sites shall include land availability based on cost consideration and suitability for medium rise construction, the population density of the area, and the financial viability of the project in relation to the affordability level of the target beneficiaries.

5.2.d As provided for under RA 7835, the NHA shall take over portions of military lands in Metro Manila and other urban areas for the development of Medium-Rise Public Housing, except in those previously identified and segregated for specific purposes pursuant to pertinent legal issuances. The NHA in coordination with the Bases Conversion and Development Authority (BCDA) shall immediately formulate the policies and guidelines pertinent to the implementation of this provision and shall likewise immediately identify and segregate said portions of military lands.

5.2.e Idle public lands, as defined in RA 7279 within high density urban areas shall be accessed for this program. NHA in consultation with HUDCC and other concerned entities/agencies shall formulate policies and guidelines pertinent to the implementation of this provision.

5.2.f Design and standards shall conform with BP 220 as implemented by HLURB, the National Building Code, and other pertinent government regulations for medium-rise housing construction and development.

5.2.g A complementary scheme of providing economic and commercial units or buildings and other internal cross-subsidy schemes shall be developed to minimize direct charges to beneficiaries with very low affordability levels while at the same time maintain the financial viability of the project.

5.2.h The process of beneficiary selection, the criteria for selection as well as the processing the occupancy of qualified Medium-Rise Public Housing beneficiaries shall be handled by a Committee to be created for the purpose, composed of the LGU concerned, NHA, PCUP and PEA (if involved),accredited POs/NGOs and other concerned entities.

5.2.i The LGU/DILG, PCUP, PEA and NHA shall formulate policies and guidelines pertinent to the collection of amortization or rent and the maintenance and management of Medium Rise Housing projects.

5.2.j The participation of the other sectors in the implementation of this Program shall be in terms of sharing of land resources, funds, technical expertise and management.

SECTION 5.3 Program Delivery Schemes.—

5.3.a Joint Venture Scheme. This is a scheme designed to maximize NHA's capacity to deliver housing units by encouraging the private sector and other entities to share their resources, expertise and organization. NHA shall contribute its corresponding equity of the total project cost. The terms and conditions of the joint venture arrangement shall be subject to mutual agreements between and among the parties concerned.

5.3.b Build, Operate and Transfer Scheme (BOT) and Other Schemes Under RA 7718. NHA enters into a contractual agreement whereby the project proponent undertakes the planning and construction, including financing, of the Medium-Rise Housing, and the operation and maintenance thereof, consistent with RA 7718, otherwise known as the Amended Build Operate Transfer Law, the project proponent may be allowed to operate the facility over a fixed term during which it is allowed to charge appropriate fees, rentals and charges sufficient to enable the developer to recover its operating and maintenance expenses and its investment in the project plus a reasonable rate of return. The project proponent transfers the facility to the government, at the end of the fixed term which shall not exceed (50) years. Other various delivery schemes identified by RA 7718 such as build and transfer or build, market and transfer shall be explored and employed, as appropriate. EHTIcD

5.3.c Direct Contracting. For Medium-Rise Public Housing, NHA may directly contract out projects to be covered by PD 1594. Other contracting schemes such as turn-key basis arrangement may be undertaken as deemed appropriate.

5.3.d Land Sharing. This is a scheme whereby a private owner or a government entity owner of an occupied land agrees with the present occupants to clear portion of the property for disposition or use of the owner while a portion is slated for Medium Rise Housing to accommodate the affected families. Under this arrangement, the NHA participates as equity contributor to be recovered either through sharing in the number of units constructed, revenues or income derived. aESHDA

SECTION 5.4 Fund Management and Control.—

5.4.a The NHA shall be responsible for the Administration and control of the Trust Fund for the Medium-rise Public and Private Housing Program in accordance with the policies prescribed in Rule XII hereof and other pertinent government regulations.

5.4.b NHA with the participating agencies or entities shall formulate an effective investment recovery scheme mechanism for the Medium-Rise Housing to ensure the return of capital fund and the efficient administration/maintenance of the said facilities.

5.4.d Funds recovered and income earned from the utilization of the Fund shall be reinvested in new projects developed under the Medium Rise Public and Private Housing Program.

SECTION 5.5 Roles and Responsibilities.—

5.5.a National Housing Authority shall formulate policies and guidelines pertinent to the implementation of the Medium Rise Housing Program, facilitate construction of medium-rise housing units and extend technical expertise in the planning, design and construction of units, management and maintenance of the Medium-Rise Housing Project. NHA shall likewise facilitate consultation with NGOs, POs and other concerned agencies on affordability, pricing and other issues related to the Medium-Rise Housing Program. cDaEAS

5.5.b NHMFC shall provide home buyers financing and formulate a schedule of amortization payments for the Medium Rise Housing facilities.

5.5.c LGU or PEA shall assume administration and maintenance of the Medium-Rise Public Housing facilities including collection of rental and other fees.

In National Capital Region (NCR),PEA shall manage and administer Medium-Rise Public Housing Projects upon mutual agreement with the LGU, where the Medium Rise Housing shall be constructed. In the regions where the PEA does not have any organization presence or where setting up a maintenance unit is deemed not feasible or viable based on the study made, the LGUs shall automatically maintain Medium-Rise Projects. In the latter case, the PEA shall extend technical assistance to the LGU concerned particularly the setting up of the maintenance unit and the upgrading of the technical capability of the LGU.

5.5.d PCUP in coordination with NHA and the concerned LGUs, shall identify beneficiaries of public rental housing facilities. It shall also formulate occupancy educational programs and organize beneficiaries into home owners association. AHcaDC

RULE VI

Community Mortgage Program

SECTION 6.1 Program Concept.—

Under Republic Act 7279, the Community Mortgage Program (CMP), through the NHMFC, shall assist organized community associations to acquire tenure and ownership of the land they are presently occupying adverse to or against the interests of landowners. Financing at very low interest rate is granted to beneficiaries to purchase the land as a whole and to improve the sites.

SECTION 6.2 Agencies and Parties Involved in Community Mortgage Program.

6.2.a NHMFC who is primary implementor of the CMP in coordination with all other concerned agencies/entities.

6.2.b ORIGINATORS shall organize, orient, assist community association/beneficiaries in securing the loan/financing thereof and enhance the management capabilities of the community association/beneficiaries. Originators may either be government agencies, private persons or peoples organization.

6.2.c COMMUNITY ASSOCIATIONS/BENEFICIARIES OR AGGRUPATION OF QUALIFIED PERSONS shall be duly organized either as cooperatives, homeowners association or condominium corporation and registered as such with the appropriate government agency/unit and shall be the owner-mortgagor of the property.

6.2.d LANDOWNER who is willing to sell his property to the beneficiaries at an agreed price and term of payment.

SECTION 6.3 Program Guidelines.—

All existing CMP guidelines issued by NHMFC shall remain in full force and effect and shall govern the utilization of funds as specified herein, provided however, that NHMFC, through its Board of Directors, may amend, improve or modify the guidelines from time to time in consultation with concerned sectors.

RULE VII

Cost Recoverable Programs

SECTION 7.1 Program Scope.—

7.1.a Cost Recoverable Programs are undertaken by government through the NHA in cooperation with LGUs; housing cooperatives, non-government organizations (NGOs) or peoples organizations (POs),landowners, developers and other government agencies whereby land, land development cost and housing construction cost are recovered from the target beneficiaries. ICAcaH

7.1.b Cost Recoverable Programs cover the various housing options, approaches and programs of the NHA to include Completed Housing, Sites and Services and other programs which may be formulated in accordance with the intent of the Cost Recoverable Program.

7.1.c Individual projects shall be undertaken under Joint Venture Scheme and shall be covered by a Memorandum of Agreement among the participating entities. Participation in the project shall be in the form of resources such as lands, funds, expertise and management.

7.1.d At least sixty percent (60%) of the total number of the house and lot packages to be produced shall correspond to the lowest loan package under the UHLP.

SECTION 7.2 Operational Framework.—

7.2.a Project Site Location:

The site identified shall be suitable for housing and title thereto is free from any lien and encumbrances.

7.2.b Equity Sharing:

7.2.b.1 NHA's maximum share of total project cost shall be determined by the NHA Board of Directors;

7.2.b.2 Joint Venture Funds shall be deposited under an escrow arrangement in a government bank. Fund releases shall be based on the approved project schedule or actual project needs;

7.2.b.3 Net earnings from the Joint Venture Project shall be pro-rated among the participating entities. Maintenance funds will remain under escrow until project turn over to the concerned LGU, agency or entity.

7.2.c Physical Aspect.

7.2.c.1 Design standards shall conform with BP 220 as implemented by HLURB and other government regulations for low and other government regulations for low-cost housing; SECcAI

7.2.c.2 Project phasing and timetable shall be agreed upon by participating entities with a maximum turnover period of two (2) years.

SECTION 7.3 Roles and Responsibilities.—

7.3.a NHA shall:

7.3.a.1 Provide technical assistance and supervision in project planning, implementation, works engineering, marketing and project turnover;

7.3.a.2 Act as Project Manager, works engineer, technical consultant and project facilitator, as requested by the joint venture partners;

7.3.a.3 Accredit and approve joint venture partners;

7.3.a.4 Provide equity funds subject to the ceiling set by the NHA Board;

7.3.a.5 Facilitate development financing and long-term home buyers financing with NHMFC and other government home lending entities; BeomPH

7.3.b The Partner-Proponent shall:

7.3.b.1 In its capacity as landowner, provide land free from any liens and encumbrances;

7.3.b.2 Prepare feasibility study, subdivision schemes, detailed architectural and engineering plans;

7.3.b.3 Provide counterpart funds for land development and housing construction;

7.3.b.4 Undertake land development and/or housing construction, to include installation of basic utilities and services;

7.3.b.5 Market units produced;

7.3.b.6 Maintain project until turnover to concerned LGU/agency or entity.

RULE VIII

Local Housing Program

SECTION 8.1 Program Scope.—

8.1.a The Local Housing Program is designed to ensure the equitable distribution of housing benefits nationwide. It shall cover selected urban and urbanizable areas in all congressional districts within a five-year period or until the corresponding funds are fully released.

8.1.b The Program is a joint undertaking between the participating LGU and NHA whereby the LGU shall identify land suitable for housing, mobilize resources (i.e. securing enabling ordinances, tapping private developers and landowners for joint venture projects, etc.) and undertake low-cost housing development. NHA, shall extend technical and financial assistance to the LGUs.

8.1.c. The Local Housing Program may cover the various housing options approaches and programs of including Sites and Services Development, Medium Rise Housing, Completed Housing and other pertinent programs.

8.1.d No additional funding shall be given to the same congressional district unless all other districts shall have been covered.

8.1.e Individual projects shall be undertaken under joint venture scheme and shall be covered by a Memorandum of Agreement among the participating entities. Participation in the project shall be in the form of resources such as lands, funds, expertise and management.

8.1.f Sixty percent (60%) of the total number of house and lot packages to be produced shall correspond to the lowest loan package under the Unified Home Lending Program (UHLP).

SECTION 8.2 Prioritization and Site Selection Procedure.—

The equitable distribution of housing benefits shall be the overriding principle of the Program. The Program shall be undertaken strictly in accordance with a systematic prioritization/selection procedure of congressional districts and the project sites in the districts, to be formulated by HUDCC and NHA and shall cover as many urban and urbanizable areas, as funds may allow.

SECTION 8.3 Allocation of Program Funds by Congressional District.

8.3.a Total program funds shall be released by the National Government within a period of five years with each congressional district provided an equitable allocation; SCADIT

8.3.b In the event that additional congressional districts are created during the implementation of this Act, the requirements of the additional shall be funded out of the funds recovered from initial investments under this program.

SECTION 8.4 Condition for Availment.—

The LGUs may avail of the Program, subject to the following conditions:

8.4.a Availability of land suitable for housing, and title thereto is free from any liens and encumbrances;

8.4.b Sanggunian Resolution authorizing the use of the LGU property for socialized housing purposes, ensuring availability of funds for land development and maintenance of the project upon completion;

8.4.c A counterpart Project team and the existence of a Local Housing Board;

8.4.d Feasibility study indicating therein the cost recovery scheme;

8.4.e Completion by the LGU of its mandates under RA 7279, particularly land inventory for housing purposes identification of sites suitable for socialized housing and registration of socialized housing beneficiaries. DSETcC

SECTION 8.5 Physical Aspect.—

8.5.a Design standards shall conform with BP 220 standards for socialized and economic housing as implemented by HLURB and other government regulations for socialized housing.

8.5.b The use of innovative housing technologies, as well as indigenous construction materials shall be encouraged.

SECTION 8.6 Fund Management and Control.—

8.6.a The NHA shall be responsible for the management, disbursement and control of funds for the Local Housing Program, the basic mechanics of which shall be governed by Rule XII hereof.

8.6.b Actual investment recovered and income earned from the utilization of the Fund shall be rolled over to finance new projects developed under the Local Housing Program.

8.6.c Net earnings from projects implemented under the joint venture arrangement shall be pro-rated among the participating entities based on the contribution of each and as prescribed in the Memorandum of Agreement executed by the parties involved.

SECTION 8.7 Roles and Responsibilities.—

8.7.a NHA shall:

8.7.a.1 Provide technical personnel to assist the participating LGU's project team in project planning, implementation, beneficiary selection, estate management and all other areas of housing development;

8.7.a.2 Disburse the corresponding fund allotment to participating LGUs for project implementation;

8.7.a.3 Conduct periodic inspection to monitor project implementation and fund utilization;

8.7.a.4 Provide other forms of technical assistance in urban and housing development as may be requested by the participating LGU.

8.7.b. The participating LGU shall:

8.7.b.1 Provide land suitable for socialized housing title thereto shall be free from all liens and encumbrances.

8.7.b.2 Provide additional funding or mobilize other resources should the funds provided under the Program would not suffice to complete the proposed project;

8.7.b.3 Undertake project operation and management, to wit: (a) site development; (b) beneficiary selection; (c) unit disposition and cost recovery; and (d) project maintenance; DAEICc

8.7.b.4 Prepare subdivision development plans as well as detailed engineering drawings, technical specifications and cost estimates;

8.7.b.5 Ensure proper use and maintenance of open spaces within the project to include the greening program;

8.7.b.6 Submit to NHA monthly reports on the physical accomplishments of the projects and utilization of the funds under the Trust Account.

RULE IX

Abot-Kaya Pabahay Fund

SECTION 9.1 Expanding the Scope and Usage of the Abot-Kaya Pabahay Fund.—

To be more responsive to the need of enhancing affordability of low-income families to acquire housing and to provide a strong support system for the operation of a secondary mortgage market system by the NHMFC as a stable source of long-term funds for housing finance, the Abot-Kaya Pabahay Fund shall be made a continuing support system of the National Shelter Program, with its scope, usage and coverage accordingly expanded.

SECTION 9.2 Budgetary Allocation Increase.—

The existing total budgetary allocation of Two Billion Five Hundred Million Pesos (P2,500,000,000) of the Abot-Kaya Pabahay Fund under Republic Act No. 6846 shall be increased to Five Billion Five Hundred Million Pesos (P5,500,000,000) and shall be appropriated annually in the amount of One Billion One Hundred Million Pesos (P1,100,000,000) for five (5) years starting from the calendar year 1996 and subsequently thereafter until the total funding requirement under RA 7835 shall have been released.

9.2.a Additional One Hundred Million Pesos (P100,000,000) annually to the cash flow guarantee to extend the mortgage insurance coverage for housing loans within the lowest interest loan package under the Unified Home Lending Program as cushion against loan delinquency and ensure a viable cash flow for agencies extending housing loans; unused funds shall be utilized in accordance with special provisions of the General Appropriations Act. CIHTac

9.2.b Annual allocation of Five Hundred Million Pesos (P500,000,000) as liquidity and interest/subsidy support to the secondary mortgage market operation of NHMFC to serve as an alternative mechanism for sourcing housing funds, tapping in the process private and public long-term development funds.

The Abot-Kaya Pabahay Fund shall thus be allocated annually among its various components in the following amounts:

P300 Million — Cash flow guarantee;

P500 Million — Interest subsidy and liquidity support;

P200 Million — Amortization support; and

P100 Million — Development financing.

The HUDCC shall from time to time, determine the income ceilings and the loanable amount requirements for Abot-kaya Pabahay Fund amortization support for both levels (a) and (b) borrowers and the socialized/low-cost housing limit eligible for developmental financing.

SECTION 9.3 Program Guidelines.—

All existing Abot-Kaya Pabahay Fund guidelines issued by NHMFC and HIGC shall remain in full force and effect and shall govern the utilization of funds as specified herein, provided however, that NHMFC and HIGC, through its Board of Directors, may amend, improve or modify the guidelines from time to time, as the need arises; Provided, further,that NHMFC through its Board of Directors shall issue guidelines relative to the interest subsidy and liquidity support components and may amend, improve and modify the same from time to time as the need arises.

SECTION 9.4 Administration Cost.—

The Abot-Kaya Pabahay Fund shall bear the cost of its administration and development in such amount and/or limits as the administering agencies shall deem appropriate, but not exceeding three percent (3%) of the net assets of the previous year. Expenses for organization and initial operation shall be provided by the administering agencies as advances, subject to reimbursement.

RULE X

Recapitalization of National Home Mortgage Finance Corporation

SECTION 10.1 Recapitalization of National Home Mortgage Finance Corporation (NHMFC).—

The authorized capital stock of the NHMFC is increased from Five Hundred Million Pesos (P500,000,000) to Five Billion Five Hundred Million Pesos (P5,500,000,000) to expand its leveraging capability based on the volume of mortgage loans being serviced, to improve its profitability by reducing the average cost of its funds made available for home-lending programs, and to enable the NHMFC to maintain the debt-to-equity ratio of 10:1.

This debt-to-equity ratio is an ideal banking/financing standard which NHMFC aims to attain after the recapitalization and debt-to-equity conversion herein provided, to enable NHMFC to compete in the financial market as it revives its secondary market operations.

Thus, Section 3 of Presidential Decree No. 1267 is amended to read as follows:

"Section 3. Capitalization.— The Corporation shall have an authorized capital stock of Five billion five hundred million pesos (P5,500,000,000) divided into Five million five hundred thousand (5,500,000) shares of common stocks with a par value of One thousand pesos (P1,000) per share, to be fully subscribed and paid by the Government of the Republic of the Philippines.

"There shall be a continuing annual appropriation to be remitted to the Corporation starting from calendar year 1995, and subsequently thereafter until the entire authorized capital stock shall have been fully paid: Provided, however,That the National Government Loan relent to the corporation in the amount of US$76.73 Million under the World Bank finance Housing Sector Project is hereby converted to equity."

Release of funds for this purpose shall be in accordance with the Funding Schedule, which forms part as "Annex A" hereof. ESHAIC

RULE XI

Recapitalization of Home Insurance and Guaranty Corporation

SECTION 11.1 Capitalization of the Home Insurance and Guaranty Corporation (HIGC).— The authorized capital stock of the HIGC is hereby increased from One Billion Pesos (P1,000,000,000) to Two Billion Five Hundred Pesos (P2,500,000,000) to strengthen the capability of the Corporation in the provision of guarantee, loan/credit insurance and other incentives to assist home building/development and to sustain housing finance: Provided, however,That the aggregate amount of the outstanding guaranty obligations shall not, at any one time, exceed twenty (20) times the capital and surplus of the HIGC.

Accordingly, Section 3 and 5 of Executive Order No. 535 are hereby amended to read as follows:

"SEC. 3. The authorized capital of the Corporation shall be Two Billion Five Hundred Million Pesos (P2,500,000,000),divided into Two Million Five Hundred Thousand (2,500,000,000) shares of common stocks with a par value of One Thousand Pesos (P1,000) per share to be fully subscribed and paid by the Government of the Republic of the Philippines."

"There shall be a continuing annual appropriation of at least Three Hundred Million Pesos (P300,000,000) starting 1995 and subsequently thereafter until the entire authorized capital stock of the Corporation shall have been in full.

"SEC. 5. The Republic of the Philippines hereby guarantees the payment by the Corporation both of the principal sums and interests of the bonds, debentures, collateral, notes or other such obligations of the Corporation, issued or incurred by virtue of its Charter and this Executive Order and shall pay such principal sums and interest in the event that the Corporation fails to do so: Provided, however,That the aggregate amount of the outstanding obligations shall not, at any time, exceed Twenty (20) times the capital and surplus of the Corporation."

"In such event, the Republic of the Philippines shall succeed to all the rights of the holders of such bonds, debentures, collateral, notes or other instruments to the extent of the payments made, unless the sum so paid by the Republic of the Philippines shall be refunded by the corporation within a reasonable time."

RULE XII

Trust Fund of the National Housing Authority

SECTION 12.1 Scope.—

A Trust Fund to be managed and administered by the NHA is created to enable the NHA to carry out the programs mandated under RA 7835, specifically the Medium-Rise Public and Private Housing Program and the Local Housing Program. cDCaTH

SECTION 12.2 General Guidelines.—

12.2.a Fund Components

12.2.a.1 The Trust Fund of the NHA shall consist of the following program components:

* Three Billion Pesos (P3,000,000,000.00) as subsidy for land acquisition, construction and implementation of the Medium-Rise Public and Private Housing to be implemented by the NHA pursuant to Section 4 (b) of RA 7835;

* Three Billion Pesos (P3,000,000,000.00) for the implementation of cost recoverable socialized housing projects in selected urban and urbanizable areas in all congressional districts under the Local Housing Program to be implemented by the NHA as provided under Section 4 (e) of RA 7835. SHCaEA

12.2.a.2 The Trust Fund, in the amount of Six Billion Pesos (P6,000,000,000.00) shall be constituted over a period of five (5) years starting in 1996, as prescribed under the Funding Schedule for CISFA funds prepared by the HUDCC (Refer to Annex A for the Funding Schedule).

12.2.b Fund Creation.

12.2.b.1 National Government Appropriations for the program components of the Fund specified in Section 12.2.a herein shall be provided under the General Appropriations Act and supported by project details/listings submitted to the Department of Budget and Management (DBM) and to Congress.

12.2.b.2 Budgetary release by the National Government for the Medium-Rise Public and Private Housing and Local Housing Program shall automatically constitute the Trust Fund under the administration and management of the NHA, as Trustee. Budgetary releases shall not be considered as additional capitalization of the NHA but rather as equity of the National Government to the Fund.

12.2.c Fund Utilization.

12.2.c.1 The use of the Funds shall be utilized to finance project development and land acquisition as provided under Section 12.2.a.1 herein and shall not be used to finance regular operations and programs of the NHA other than two program components of the Fund.

12.2.c.2 The Fund shall bear the cost of its administration and development in such amount and/or limits as the NHA shall deem appropriate, but not to exceed three percent (3%) of the net assets of the previous year. Expenses for organization and initial operation of the Trust Fund shall be provided by NHA as advances, subject to reimbursement.

12.2.c.3 Projects to be funded out of the Fund and the cost of administration and development to be charged against the Fund shall be subject to the approval by the NHA Board of Directors and subject further, to the rules and regulations of the Commission. on Audit.

12.2.d Investment Recovery.

Actual investment recovered plus the income earned from the implementation of projects under the Local Housing Program and the Medium-Rise Public and Private Housing Program shall be reverted to the Trust Fund and rolled-over to finance new projects under the two (2) program components of the Fund.

SECTION 12.3 Accounting and Reporting Requirements.—

12.3.a A separate Accounting System shall be developed and maintained for the Trust Fund. Books of the Account shall be maintained separately for the Medium-Rise Public and Private Housing and the Local Housing Programs.

12.3.b The NHA shall submit annually to the President of the Philippines, the Congress of the Philippines and the Department of Budget and Management a detailed report covering the status of the Fund and the accomplishment in the implementation of the program components of the same. Said report shall be made available at all times to any interested party. AcEIHC

SECTION 12.4 Mechanics of the Trust Fund.—

The mechanics of the creation, utilization and administration of the Trust Fund shall be formulated by the NHA, the Department of Finance (DOF) and the DBM in accordance with the policies prescribed herein and other pertinent government regulations (Refer to Annex B hereof).

RULE XIII

Appropriations by the National Government

SECTION 13.1 Appropriations.—

The following amounts shall be released as appropriated by the national government to the corresponding programs.

13.1.a Five Billion and Two Hundred Million Pesos (P5,200,000,000) to finance the Resettlement Program;

13.1.b Three Billion Pesos (P3,000,000,000) as subsidy for land acquisition, construction and implementation of the Medium Rise Public and Private Housing Program;

13.1.c Twelve Billion Seven Hundred Eighty Million Pesos (P12,780,000,000) for the Community Mortgage Program;

13.1.d Two Billion Five Hundred Forty-Two Million Pesos (P2,542,000,000) for the Cost Recoverable Program;

13.1.e Three Billion Pesos (P3,000,000,000) for the Local Housing Program.

SECTION 13.2 Fund Sources.—

The following shall be the fund sources for this Act:

13.2.a Proceeds from documentary stamp tax: Provided, that Section 22 (A) of Republic Act No. 7660 shall be amended to read as follows:

Sec. 22 The incremental revenues from the increase in the documentary stamp taxes under this Act be set aside for the following purposes:

a) Twenty five percent (25%) of the incremental revenues in 1994 and 1995 under this Act shall be automatically appropriated for the Unified Home Lending Program under Executive Order No. 90 particularly for mass-socialized housing to be allocated as follows: fifty percent (50%) for mass-socialized housing; thirty percent (30%) for the Community Mortgage Program administered by the National Home Mortgage Finance Corporation; and twenty percent (20%) for land banking and development to be administered by the National Housing Authority. Provided, further,That incremental revenues not appropriated in 1994 and 1995 shall be carried over to succeeding years until allocation herein provided shall have been exhausted. SHAcID

13.2.b Forty percent (40%) of the mandatory fifty percent (50%) share of the National Government from the annual aggregate gross earnings of the Philippine Amusement and Gaming Corporation (PAGCOR); as provided for in Section 12 of Presidential Decree No. 1869, beginning 1996;

13.2.c Twelve percent (12%) of all the proceeds of any sale, after deducting all expenses related to the sale, of portions of Metro Manila military camps, considering further provisions of Section 1 RA 7917;

13.2.d All fund sources outlined in RA 7279, not accruing to the local government units, to wit:

* A minimum of fifty percent (50%) from the annual net income of the Public Estates Authority (PEA) to be used by NHA to carry out its program of land acquisition for resettlement purposes;

* Proceeds of ill-gotten wealth not otherwise previously set aside in any purpose;

* Loans, grants bequests and donations, whether from local or foreign sources; and

* Proceeds from the sale or disposition of alienable public lands in urban areas.

13.2.e Proceeds from forfeited customs bonds;

13.2.f A maximum of fifty percent (50%) of savings from the budgeted amounts for debt servicing;

13.2.g Ten percent (10%) of the mandatory annual contributions by the Philippine Charity Sweepstakes Office to the charity fund;

13.2.h All unused agri-agra allocation funds from banks in the preceding year,

13.2.i Rediscounting facility of the Bangko Sentral ng Pilipinas to institutions or entities providing financing for socialized and low-cost housing;

The above funding sources shall be remitted to the National Treasury by the concerned agencies immediately upon the availability thereof, which in turn shall issue a certification that said amount is available.

SECTION 13.3 Funding Schedule.—

A total amount of not less than Five Billion Pesos (P5,000,000,000) shall be annually released as appropriated by the national government starting from the fiscal year 1995 and every fiscal year thereafter until such time that the total funding requirements as provided for in the Act shall have been fully released. For this purpose, a funding schedule shall be prepared and submitted by HUDCC to the Department of Budget and Management (DBM) indicating the individual program fund breakdown. Administering agencies shall reflect in their annual budgets, the sums or amounts needed for their programs and equity infusions mandated in the Act in accordance with the HUDCC funding schedule. DBM, after regular consultations on the proposed budget, shall release to the housing agencies the amount required not later than the first quarter of the pertinent fiscal year.

RULE XIV

Review of the IRR

These Implementing Rules and Regulations (IRR) shall be subject to review from time to time by the HUDCC. Any amendments thereto deemed proper and necessary shall be promulgated by the Council, in coordination and consultation with concerned agencies/sectors.

RULE XV

Repeal

All implementing guidelines, rules and regulations and other issuances or part thereof which are inconsistent with this IRR, are hereby repealed, amended or modified accordingly.

RULE XVI

Separability Clause

If for any reason, any part/portion of this IRR is declared invalid or unconstitutional, the remaining provisions not affected thereby shall continue to be in full force and effect. aDcEIH

RULE XVII

Effectivity

This IRR shall take effect immediately upon its complete publication in at least two (2) national newspapers of general circulation.

Approved, this 17th day May 1995, in Makati City, Metro Manila.

BY:

(SGD.) DIONISIO C. DE LA SERNAChairman

Published in the Manila Chronicle on July 1, 1995.