Common Misconceptions About SSS Housing Loans

handing a miniature house

The Philippine government is one of the best sources of financing among buyers of Lancaster homes in Cavite. Compared to other lenders, such as banks and developers, the government agencies can provide longer loan terms, offer more competitive interest rates, and extend credit to unbanked and high-risk borrowers.

The Home Development Mutual Fund, or the Pag-IBIG Fund, is prevalent among Filipinos. However, do you know that the Social Security System (SSS) also offers housing loans? To understand how to qualify for SSS housing loans and use them to great effect, let’s dispel the common misconceptions about them:

You Can Only Buy a Property With an SSS Housing Loan

Wrong. You can also apply for an SSS housing loan for repairs and home improvements. If you need to fix a broken roof, construct a fence or gate, or expand your livable space, SSS can provide you the funds you need.

Furthermore, eligible borrowers can use an SSS housing loan to build a dwelling on vacant land or buy an empty loan and then construct a house later on.

You can also use an SSS housing loan for the assumption of a mortgage. If you’re in good standing, you can request for financing to take over the responsibility of paying the remaining principal balance of another member’s existing SSS housing loan. This type of credit may be a clever strategy to buy a property in danger of foreclosure.

Any SSS Member Can Apply

Not all SSS housing loans are available to all of the government agency’s members. Some financial products are offered explicitly to Overseas Filipino Workers and Workers’ Organization Members. Other members, however, can qualify for housing loans for repair, home improvement, and the assumption of mortgage.

a row of houses

You Need 120 Months of Contribution to Qualify

The 120-month rule applies to the SSS’s retirement benefit. For the agency’s housing loans, a 36-month contribution history is the only minimum requirement. However, a borrower needs to pay 24 contributions straight before application.

Members Aged 60 or Above Can’t Apply

Generally, borrowers who are 60 years at the time of application don’t qualify for mortgages. One of the reasons why most lenders have an age requirement is to ensure that the borrower can live long enough to repay the loan.

Also, the retirement age in the Philippines 60, making the time when a person’s income potential decreases. The Congress is even trying to lower the retirement age of government employees to 56 to give them the option to take advantage of senior citizen benefits much early.

SSS, however, allows qualified borrowers aged 60 and above at the time of application. The only catch is that the housing loan must be repaid within a maximum period of 60 months. A five-year loan term increases monthly mortgage payments but decreases interest and therefore the overall cost of borrowing.

SSS is not a feasible financing vehicle for all property-buying Filipinos. Still, it pays to know that it can be an option to achieve your homeownership dream.