AN ACT TO CREATE THE HOME FINANCING COMMISSION, TO STIMULATE HOME BUILDING AND LAND OWNERSHIP AND TO PROMOTE THE DEVELOPMENT OF LAND FOR THAT PURPOSE, PROVIDE LIBERAL FINANCING THROUGH AN INSURED MORTGAGE SYSTEM, AND DEVELOP THRIFT THROUGH THE ACCUMULATION OF SAVINGS IN INSURED INSTITUTIONS.

[ REPUBLIC ACT NO. 580, September 15, 1950 ]

AN ACT TO CREATE THE HOME FINANCING COMMISSION, TO STIMULATE HOME BUILDING AND LAND OWNERSHIP AND TO PROMOTE THE DEVELOPMENT OF LAND FOR THAT PURPOSE, PROVIDE LIBERAL FINANCING THROUGH AN INSURED MORTGAGE SYSTEM, AND DEVELOP THRIFT THROUGH THE ACCUMULATION OF SAVINGS IN INSURED INSTITUTIONS.

Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled;

Section 1. This Act shall be known and cited as the "Home Financing Act."

CHAPTER I
CREATION OF THE HOME FINANCING COMMISSION

Section 2. There is hereby created a body corporate to be known as the Home Financing Commission which shall have its principal place of business in the City of Manila and shall exist for a period of fifty years. The functions of this Commission shall be—

Section 3. Membership. - The Commission shall be compose of five members appointed by the President of the Philippines with the consent of the Commission on Appointments. The President shall designate one of the members as Chairman of the Commissions who shall receive a compensation of twelve thousand pesos per annum. Two of the members appointed shall be officers or directors of non-government mortgagee-institutions participating in the insured mortgage program in accordance with the provisions of this Act. Unless holding other offices in the Government or a position with fixed compensation in any Government corporation or instrumentality, the members shall receive for each meeting of the Commission attended a per diem of twenty pesos: Provided, however, That a member shall receive a total of not more than one thousand pesos a year in per diems. The Chairman shall fold office for five years. The members of the Commission shall likewise hold office for five years, with the exception of the members first appointed who shall serve for one, two, three and four years, respectively, as stated in their appointments. Thereafter, the person appointed to succeed a member of the Commission whose term shall have expired shall continue to serve for the full five-year term, and, except in the case of vacancies caused otherwise than the expiry of the term, only one member shall be appointed to the Commission each year. In the event of a vacancy, the successor appointed to fill the same shall serve only the unexpired portion of the term of the member he succeeds.

Section 4. Powers. - The Commission shall have the following power:

Section 5. Procedure. - The Chairman of the Commission shall preside over its deliberations and shall be its General Manager. The decisions of the Commission shall be made by a vote of the majority of all its members.

Section 6. Home Financing Fund. - There is hereby authorized to be appropriated an amount not exceeding five million pesos to be designated as a Home Financing Fund, which shall be used by the Commission to carry out the provisions of this Act; and for this purpose the Commission is hereby authorized, with the approval of the President, to borrow such amounts as may be necessary from any government office, agency, or instrumentality or private financing entity or entities authorized to give loans. This loan may be negotiated in the form of bonds under the authority contained in section four (d) of this Act.

Section 7.

(a) Accountant. - The accountant of the Commission and the subordinate personnel of the Accounting Office shall be appointed by the Commissioner of the Budget. The Commission shall fix the salary of the accountant and the number and rates of salaries of the personnel of the Accounting Office.

(b) Auditor. - The auditor of the Commission shall be appointed by the Auditor General, who shall also appoint and for cause, remove, upon the recommendation of the Auditor, the personnel of the Auditing Office. The Commission shall fix the salary of the Auditor and the number and rates of salaries of the personnel of the Auditing Office. The amount of other operating expenses of the Auditing Office shall also be fixed by the Commission. The Auditor shall submit, through the Commission, a semiannual report on the financial condition and the result of the operation of the Commission to the President, the Senate through its President, the House of Representative, through the Speaker, the Secretary of Finance, the Sec- retary of Economic Coordination, and the Auditor General.

Section 8. Report. - The Commission shall submit an annual report to the President and to the Congress of the Philippines, after the first day of January of each year but not later than the first day of April, regarding its activities under this Act for the previous year.

CHAPTER II
CLASSIFICATION OF RISKS AND METHOD OF INSURING LENDING INSTITUTIONS

Section 9. With a view to encourage the financing of new construction for small business, agricultural and residential units in a limited amount, the repair of existing residential, small business or agricultural buildings and the rehabilitation requirements and recovery from damage caused by the elements, the Home Financing Commission shall prescribe rules and regulations to govern the insurance authorized under this section in accordance with the provisions set forth hereunder:

Section 10.

Section 11.

Section 12. To be eligible for insurance under this section—

Section 13. In order to assist in relieving the acute shortage of housing which now exists and to promote the production of housing at moderate prices or rentals, through the application of modern industrial processes, the Commission is authorized to insure loans to finance the manufacture of housing or the materials to be used in the construction of houses, when such loans are eligible for insurance as provided in the rules and regulations to be prescribed by the Commission, with the approval of the President of the Philippines.

Section 14. In order to assist in developing rural areas and to encourage development of agricultural areas by individuals and associations, the Commission is authorized to insure loans as hereinafter provided:

GENERAL PROVISIONS

Section 15.

Section 16. To be eligible for insurance under this chapter, a mortgage shall—

PAYMENT OF INSURANCE

Section 17.

INVESTMENT OF FUNDS

Section 18. Moneys in the Fund, not needed for the current operations of the Home Financing Commission, shall be deposited with the Treasurer of the Philippines to the credit of the Fund, or invested in bonds or other obligations issued or guaranteed as to principal and interest by the Government. The Commission may purchase in the open market debentures issued under the provisions of this Act. Debentures so purchased shall be cancelled and not reissued.

CHAPTER III
NATIONAL SAVINGS AND LOAN ASSOCIATIONS

Section 19.

Section 20.

Section 21. Each institution whose application for insurance under this Chapter is approved by the Commission shall be entitled to insurance up to the par value of the shares of each of its shareholders: Provided, however, That no shareholder shall be insured for an aggregate amount in excess of ten thousand pesos.

Section 22. The Commission is hereby authorized to prescribe, in accordance with existing laws, rules and regulations governing the procedure to be followed in the event of a default by any insured institution including the rehabilitation or liquidation of such insured institution.

Section 23. To enable the Commission to encourage local thrift and local home financing and to promote, organize and develop the associations herein provided for, the Commission is hereby authorized to use money from the Fund. The sums expended under this section shall be used impartially in the promotion and development of local thrift and home financing institutions.

Section 24. Each association organized under this Chapter shall use the words "National Savings and Loan Association" in their corporate names in addition to any other specific designation that may be used, and, further, that no other corporation or association other than those organized under this Chapter shall be permitted to use the words "National Savings and Loan Association."

CHAPTER IV
MISCELLANEOUS

Section 25. Definitions. - As used in this Act:

Section 26. Amendatory provisions—

Section 27. Penalties. -

Section 28. Separability provisions. - If any provision of this Act, or the application thereof to any person or circumstances, is held invalid, the remainder of the Act, and the application of such provision to other persons or circumstances, shall not be affected thereby.

Section 29. All laws or parts of laws inconsistent with the provisions of this Act are hereby repealed.

Section 30. This Act shall take effect upon its approval.

Approved, September 15, 1950.

a. The Commission is authorized to insure banks, insurance companies, building and loan associations and other qualified lending institutions against losses which they may sustain as a result of eligible property improvement loans. The lending institutions shall be charged with the responsibility of exercising the proper credit judgment in making the loans.

b. The lending institution shall be insured against loss up to ten per centum of the aggregate net amount loaned over a given period.

c. Four classes of loans may be insured under this section at the discretion of the Commission even though they may be subject to existing mortgages: