REPORTERS:

Afidchao, Paul Sheacon

Arcilla, Jinky Jane
Andamo, Phoebe Maxine
Labilles, Jett

REPUBLIC ACT NO. 7742 AMENDING PRESIDENTIAL DECREE NO. 1752,

EXECUTIVE ORDER NOS. 35 AND 90
OBJECTIVES
1. To promote home ownership through the establishment of an affordable and adequate
housing credit system for its members;
2. To invest the provident savings of its members taking into consideration profitability and
safety of the funds as a means of providing them provident benefits upon termination of their
membership in the Fund;
3. To provide small and short-term loans and other benefits to its members; and
4. To promote self-reliance and self-determination among workers through membership in an
integrated nationwide savings system.
WHAT IS HOME DEVELOPMENT MUTUAL FUND?
It is a provident savings system for employees in the private and public sectors supported by
matching contributions of their respective employers, with housing as primary investment. The
system is also available to self-employed and other working groups. The Fund is private in
character, owned wholly by the members, administered in trust and applied exclusively for their
benefit. All personal and employer contribution shall be fully credited to each member,
accounted for individually and transferable in case of employment.
Provided however, that coverage of the employees whose monthly compensation is LESS
THAN (P4,000.00) shall be VOLUNTARY; Provided further, that upon membership with the
Fund, their employer shall contribute an amount in accordance with Section 1 of Rule VI hereof.

What if a member transfers to another employer or becomes self-employed?

He carries with him his Total Accumulated Value. HDMF members who subsequently become
self-employed or self-paying shall remit their contributions directly to the Fund. However,
should they be member-borrowers, they shall also pay the employers counterpart.
MEMBERSHIP TERM

20 years commencing from the first day of the month to which the members initial
contribution to the Fund applies

MEMBERSHIP TERMINATION

Membership Term Maturity;

Death;

Retirement;

Permanent Total Disability or Insanity

Departure from the Country permanently;

Termination from the service by reason of health.

RETIREMENT

Compulsory Retirement 65 y/o

Early Retirement upon the occurrence of any of the following:

1. His actual retirement from the SSS, GSIS or separate employer provident/retirement
plan, provided, however, that under the latter case, the member has at least reached age
forty-five (45);
2. Notwithstanding his continued employment or service upon reaching age sixty (60);
provided, he is not a member-borrower.
REGISTRATION

It shall be the DUTY of every EMPLOYER to register all his covered employees by
submitting to the Fund all data and information the Fund may require in relation to their
respective businesses and employees

Voluntary Members shall be registered by his employer within thirty (30) days from the
date he signifies in writing his intention to join the Fund.

RATE OF CONTRIBUTIONS
a. Employees earning NOT more than P1,500.00/ month 1%
b. Employees earning MORE THAN
P1,500.00 /month 2%
c. Employers 2%of the Monthly Compensation of the contributing member.
A member may be allowed to contribute MORE THAN what is required herein should he so
desire. Employer is only mandated to contribute what is in subsection (c) . The contributions to
the Home Development Mutual Fund shall be remitted through SSS and GSIS. NONPAYMENT- subject the employer to penalty of 3%/month of the amount.
COLLECTION
Contributions of members shall be collected through payroll deductions by their respective
employers, who for this purpose shall act as agent both of the Fund and the member.
Employers Fiduciary Obligation The employer assumes a fiduciary relationship with both
the Fund and the members concerned as regards the latters contribution and the required
employer contribution, as well as the remittance thereof.
SUSPENSION OF CONTRIBUTION

Resignation

Laid-off

Suspended from employment

WAIVER AND SUSPENSION

An employer and/or employee group who has an existing housing plan as of the effectivity of
Republic Act No. 7742 may apply with the Fund for waiver or suspension of coverage. It must
NOT CONTRAVENE any effective collective bargaining or other existing agreement and that
the features of the plan or plans are superior to the Fund and continue to be so.
Distressed Employer An employer who suffered at least twenty-five (25%) percent capital
impairment for the past taxable year immediately preceding the filing of his application for
waiver or suspension of coverage
RETURN OF CONTRIBUTIONS

A member shall be entitled to receive his Total Accumulated Value upon termination of his
membership. PROVIDED, he is free from any pending obligation with the Fund or any of its
loan programs.
In the event of his DEATH, his legal heir shall likewise receive the same free from any pending
obligation with the Fund or any of its loan programs.
OPTIONAL WITHDRAWAL

after the 10th or 15th year of CONTINUOUS membership

NO outstanding housing loan with the Fund at the time of withdrawal.

exercised only ONCE

NOT PREJUDICE his continuing membership in the Fund.

RETURN OF CONTRIBUTIONS

OTHER BENEFITS:

Dividend Benefits

Death Benefits

ADJUDICATION AND CLAIMS

original and exclusive jurisdiction over all claims and disputes on any matter relative to
the implementation of the provisions of Presidential Decree No. 1752

affecting the rights and interest of the members

Decision of the President of the Fund shall be final and unappealable after lapse of 30 days from
receipt of notice by the aggrieved party of such decision and without him taking the appropriate
remedies available to him to the Board of Trustees. Decision of the Board of Trustees shall,
unless appealed to a competent court, become final and unappealable after 15 days from notice
of such decision.
INVESTMENT OF MONEY
No less than seventy (70%) percent of the Funds investible funds shall be invested in housing in
support of the National Shelter Program as provided for under Executive Order No. 90.
SUBSTITUTE RETIREMENT PLAN
A private employer shall have the option to treat the coverage of the Fund as a substitute
retirement benefit for the employee concerned within the purview of the Revised Labor Code;

Provided, such option does not in any way contravene any effective collective bargaining or
other existing agreement.
CASES
Romulo, Rabanta, Buenaventura, Sayoc and Delos Angeles v. HDMF

use of phrase and/or

An employer and/or employee group who has an existing provident or

retirement plan as of the effectivity of Republic Act No. 7742 xxx

China Banking Corp. v. HDMF

Waiver and Suspension of Fund Coverage