A FILIPINO-OWNED financing company said it will start offering home construction loans of up to P5 million to families struggling to secure financing from banks amid stringent document requirements.
“Families keep telling us the same thing — they have the land, but they simply cannot raise the money to build. This is the gap we are trying to bridge,” AFC SME Finance Inc. President Bernadette Recto said in a statement on Tuesday.
The financing program is designed for borrowers who have the capacity to repay loans but may not meet the documentation requirements of conventional lenders.
These include market vendors, small contractors, farmers, jeepney and tricycle operators, and families supported by overseas Filipinos.
Employed individuals and owners of micro, small and medium enterprises may also apply, subject to credit evaluation.
Under the program, eligible borrowers can obtain loans of up to P5 million, subject to the verified cost of the construction project or a loan-to-value limit of 70 percent. Repayment terms can extend to 20 years.
Applicants must use a lot they own as collateral, with a verified land title under their name.
Recto said the company assesses borrowers based on their income and their realistic capacity to repay, applying the same approach it uses when evaluating small-business borrowers.
“We look at what a household earns and what it can realistically carry. That is the same discipline we apply to small business borrowers,” she said.
“Applied to housing, it reaches families who have been paying their obligations faithfully for years and have simply never been visible to a bank.”
Rather than releasing the entire loan at once, AFC SME disburses the funds in three or four tranches, depending on construction progress and compliance with the requirements for each release.
The arrangement links the availability of financing to the progress of the project, allowing borrowers to access funds as construction advances.
