CMP: Assuring Land and Housing for the Poor
Friday, October 13, 2006
By: Atty. Joseph Peter "Jopet" Sison
President, National Home Mortgage Finance Corporation
LP NECO Member
With the onset of urban development in key population centers of the country came the phenomenon of rural migration. In search of jobs and seeing the economic opportunities otherwise not easily available in the countryside, people have moved to the cities and urbanizing areas, bringing in cheap sources of labor and contributing to congestion in these areas. And with the scarcity of residential lands these rural migrants have established colonies of informal settlers in and around the cities and nearby suburbs, on both private and publicly owned lands.
Up to this time, the issue of addressing the land tenure and housing security of these so-called "informal settlers" is as current and relevant as it was decades ago.
Some eighteen years ago, the National Home Mortgage Finance Corporation was privileged to have been among the principal partners, under the stewardship of the Housing and Urban Development Coordinating Council (HUDCC), who have collaborated in coming up with a home financing intervention to address the shelter needs of those considered “the poorest of the poor.”
This preferred home financing solution is called the Community Mortgage Program (CMP). This was anchored on the belief that those living in slums and blighted communities could be enabled and empowered for housing acquisition. By pooling their individual resources and by undertaking to share in the repayment of group or community loans, the homeless low-income earners could afford decent shelter for themselves and their families.
Thus, sometime in 1988, CMP was first launched as an in-house, corporate program of the NHMFC. This was during the time immediately after the EDSA 1 Revolution. The buzzwords then were people power, people empowerment, and the like.
Among others things, CMP was premised on the belief that the urban poor can be “bankable,” and credit-worthy. Contrary to the erstwhile bias against the so-called squatters, CMP will prove later on that these groups of borrowers can be entrusted with a housing loan, and that they will repay their loan.
During the time it was launched, CMP was considered as an innovative loan scheme. A
ll other housing loans at that time were granted only to individual borrowers, or up to three tacked-in borrowers for a single loan and a single lot or house and lot, as loan collateral. The loan scheme, however, will not work for the very low-income urban poor, whose individual loan capabilities and loan affordability levels are almost minimal. Moreover, subdividing a parcel of tenanted land to all its occupants and using such individual titles for loan purposes, will add more costs, as to make the loan repayment outside the reach of these prospective housing beneficiaries.
The immediate concern is loan affordability by the CMP borrowers. Once this is assured, the next step is to assure land tenure of those who are informally occupying either government or private lands. The strategy was to pool the individual loan capacities of the home seekers, by organizing them into community association as the CMP borrower. The land occupied or to be occupied by the association members, will serve as the undivided loan collateral. This will stay as a group loan, until after the association decides to subdivide the land and “individualize” the loans to make the loan responsibility those of the individual association members.
The assumption that the primary need of the homeless urban poor is to assure their tenure and ownership of the land is born by the fact that 95% of cumulative loans from 1989 to August 2006 were used for land purchase only. Only a small 5% of said loans was used other than for land acquisition. This is despite the fact that CMP loans may be availed of in three (3) stages – land acquisition; land/site development; and house construction/improvement. This trend may be explained further by the fact that most of the lands purchased using the CMP loans are where the community association members are already situated. Moreover, home improvements are being done on an incremental basis. As additional incomes come in, families introduce or add new improvements.
CMP also capitalizes on the fact that informal settlers, particularly those who have been occupying the land for quite some time, have virtually gained an "implied equity" on the land. The landowner is faced with the fact that the tenanted urban land has depreciated in value. He stands to incur a substantial cost in relocating the land occupants. These costs have worked in favor of the land occupants, such that the landowner after some cost-benefit analysis ultimately decides to sell the land to the occupants at a highly-discounted price.
Another unique characteristic of home lending through CMP is that the loan transaction may only push through when the association of informal settlers agrees to buy the land; and its owner aggresses to sell the property to the association.
More than this, CMP also involves the partnership among the community association of informal settlers as the borrower, the landowner as seller and recipient of the loan proceeds, the local government unit, the non-government organization or people’s organization, and of the government as the loan originator.
The National government serves as the CMP financing agency. In the present case, it is the Social Housing Finance Corporation which is a subsidiary of the NHMFC, currently implements CMP.
As a rule, CMP loans are targeted to borrowers who belong to the lowest 30% of the income population.
Figures show that as of August 2006, the cumulative total of CMP loans reached P6.3 billion, which financed a corresponding total of 1,400 urban poor housing sites nationwide. The cumulative number of beneficiaries totaled 177,277.
posted by Liberal Party of the Philippines @ 10:45 AM,
0 Comments:
Liberal Party
Address
4/F J&T Tower, 3894 Ramon Magsaysay Blvd., Sta. Mesa, Manila
Contact Us
7158505, 7157040, 7130737
liberalparty.ph@gmail.com
The Liberal Online
Editor-in-Chief
Robert Anthony RamosBlog Master
Donna Babadillaliberalpartyphilippines@gmail.com
