Posted on July 17, 2014 09:59:55 PM [ BusinessWorld Online ]
MASS HOUSING developer 8990 Holdings, Inc. said it collected over P1 billion in the first half from the Home Development Mutual Fund (HDMF) to pay for homes bought by the latter’s mortgage clients.
The so-called “takeout” payments, which compensate the developer in full for the building costs and transfer the risk to the financial institution, totaled P1.126 billion, spread over 1,335 housing accounts.
“8990 has agreed with HDMF to enter into a collection service agreement… This is because we have a comprehensive collection platform nationwide that will greatly help HDMF efforts in all 8990 projects,” 8990 President and Chief Executive Officer Januario Jesus Gregorio III B. Atencio said in a text message.
Last year, 4,968 housing accounts were migrated to HDMF for takeout under the Fund’s existing housing loan program.
This is equivalent to P4 billion worth of contracts to sell (CTS) from 8990’s various low-cost housing projects the cities of Angeles, Lipa, Cebu, Iloilo and Davao. It also represents 35% of 8990’s total CTS portfolio, which amounts to P11.5 billion.
Because of this, 8990 was able to secure the top spot in HDMF’s ranking of top 10 developers in terms of takeout value, followed by Cumberland Development Corp. (P669 million) and Homemark, Inc. Group of Companies. (P569 million).
Last year, 8990 was ranked ninth.
Developers typically prequalify homebuyers for financial institutions, picking out those who are most likely to qualify for loans. A poor default record by homebuyers reflects badly on the developer, which may result in future difficulty finding institutions willing to finance its customers. On the other hand, if it can convince institutions like HDMF to lend money to its homebuyers, it can be taken as a sign that its credit evaluation process is sound.
The government has allocated P50 billion for HDMF’s individual housing loan projects this year.
8990’s first-quarter net income grew 30.26% year on year to P933.6 million, while gross revenue rose 24% to P2.15 billion.
Costs and expenses increased 21.6% to P1.18 billion.
8990 shares gained 23 centavos or 2.89% on Thursday to close at P8.20. -- Daphne J. Magturo