NHMFC in 2023: enhanced HLRPP and increased digitization

This year, the National Home Mortgage Finance Corp. (NHMFC) is celebrating its 45th Anniversary as the government’s premiere Secondary Mortgage Institution (SMI). For over four decades and a half, NHMFC witnessed improvements and changes in the provision of housing finance and in the capital market.

Among all the milestones of NHMFC, the Bahay Bonds series was the most notable.

In 2009, NHMFC launched the P2.06 billion Bahay Bonds 1 (BB1), its maiden securitization issuance. It was the first ever residential mortgage-backed securities issued by a government agency in the Philippines.

The BB1 was remarkable since it emerged amid the global financial crisis that caught many of the world’s economies. It was also recognized as the “Securitization of the Year” by Asset Asian Awards 2009.

Following the success of BB1, NHMFC issued the second series of Bahay Bonds in 2012 – the Bahay Bonds 2 (BB2). The BB2 is the first retail mortgage-backed securities, which was later awarded as the “Innovative Listed Corporate Bond Issue of the Year.”

On Pambansang Pabahay sa Pilipino Program

As one of the Key Shelter Agencies (KSAs) under Department of Human Settlements and Urban Development (DHSUD), the NHMFC envisions itself at the forefront of policy development supporting DHSUD and the National Government in their direction to achieve the goals of the Marcos administration’s housing program.

The Pambansang Pabahay Para sa Pilipino program is a housing project of President Ferdinand “Bongbong” Marcos Jr. through DHSUD that aims to provide one million housing units annually to Filipinos.

“NHMFC aims to play a vital role in this endeavor, with the viewpoint of providing the necessary funding through securitization of the real estate mortgages generated by participating private banks and other government financial institutions (GFIs),” NHMFC President Renato Tobias said.

In the recently-held NHMFC Stakeholders’ Night, housing secretary Jose Rizalino “Jerry” Acuzar declared that the compliance Asset-Backed Securities (ABS) of NHMFC has been approved by the Securities and Exchange Commission (SEC).

Plans for 2023

Among the plans of NHMFC for 2023 is to elevate their Housing Loan Receivables Purchase Program (HLRPP) and improve the digitalization of their services.

According to Tobias, NHMFC stands on its objective of developing the secondary mortgage market through securitization – which can be maximized by strengthening HLRPP and boosting technology.

The housing agency is planning to further streamline their HLRPP processes, eliminate bottlenecks and unnecessary requirements.

“In 2023, our partner originators will benefit from a harmonized and enhanced Housing Loan Receivables Purchase Program. In addition, NHMFC will officially launch its bulk purchase program which will positively benefit us and our partner developers,” Tobias said.

Tobias also mentioned that they had been working hard to increase the number of accounts eligible for securitization through effective servicing and management of purchased accounts.

“In the years to come, we are hoping to maintain the collection efficiency ratio of our current accounts to 98 percent,” he added.

The NHMFC also anticipates joining the growing list of public and private institutions who have incorporated technology as part of their processes. The corporation seeks to partner with organizations who offer digital solutions like PropTech Consortium of the Philippines to further improve delivery of public service.

“Through the digitization of our housing loan evaluation process, we will be able to further enhance our credit and portfolio analysis and in structuring and packaging housing loans into asset pools for securitization,” Tobias stated.