HISTORY

The National Home Mortgage Finance Corporation was created in 1977 by virtue of Presidential Decree 1267, with the mandate of increasing the availability of affordable housing loans to finance the Filipino homebuyer acquisition of housing units through the development and operation of a secondary market for home mortgages. Consistent with this mandate NHMFC bought mortgages originated by private financial institutions, and eventually sold them back to the public through the issuance of mortgage backed financial instruments.

However, the financial crisis which hit the country in 1984 up to the early part of 1986 caused the collapse of a relatively successful home-financing program of the government. Since a sizeable portion of NHMFC funds came from the financial market, in addition to funds coming from contributions of PAG-IBIG members, the 30% to 40% interest rates in the financial market made it impossible for NHMFC (whose lending rate was pegged at 9%) to operate viably.

With the assumption into office of the Aquino Administration in 1986, there was already a felt need to reorganize the government housing agencies and define their new mandates. Executive Order No. 90 on December 17, 1986, gave fresh mandates to the five housing agencies, NHMFC included. As the major government home mortgage institution, NHMFC was tasked to operate a viable home mortgage market, utilizing long-term funds principally provided by the Social Security System (SSS), the Government Services Insurance System (GSIS), and the Home Development Mutual Fund (HDMF), to purchase mortgages originated by both private and public institutions that are within government-approved guidelines. It was also charged with the development of a system that will attract private institutional funds into long-term housing mortgages.

In view of the above, NHMFC