Contract-to-Sell (CTS) Financing
CTS (Contract-to-Sell) Financing is a facility intended to refinance the Developer’s CTS receivables from its existing project/s and institute wholesale acquisition of accounts for conversion to retail accounts. Also, for the purpose of accelerating project development and sale.
Should not exceed the Single Borrower’s Limit (SBL) of OFBank (formerly Postbank)
Purchase Amount – Up to eighty percent (80%) of the contract price as stipulated in the CTS or the outstanding balance whichever is lower
CTS outstanding balance should not be lower than ₱300,000 except for parking lot of existing buyers of condo units with CTS already purchased by OFBank (formerly Postbank)
Up to a maximum of ten (10) years or the remaining term of the CTS whichever comes first
The facility shall be available for six (6) months from date of approval.
|Mode of release|
Thru direct credit to the borrower’s account maintained at OFBank (formerly Postbank) or thru issuance of Manager’s Check in favor of the borrower
Availment may be made in batches with a minimum of ₱2,000,000 per batch
|Interest Rate||Based on the prevailing posted lending rate of the Bank at the time of loan availment or as may be contracted or agreed upon by the Bank and the borrower, provided that such rate does not drastically deviate from the prevailing posted rate and is well above the break-even threshold of the Bank|
|Interest Repricing||Monthly, Quarterly, Semi-annually, Annually and Fixed for the term|
|Mode of Repayment|
a.) Issuance of Post-Dated Checks (PDCs) covering all installments/ amortizations every repricing period; or,
b.) Direct debit from the borrower’s deposit account with OFBank (formerly Postbank)
Repayment shall be sourced from collections on assigned installment receivables coming from the CTS.
a.) Deed of Assignment of CTS with full recourse to/with buy-back guarantee of the Developer and delivery of original CTS to OFBank (formerly Postbank).
b.) Safekeeping ODC of title, certified true copy of tax declaration, certified true copy of tax receipts and other related documents such as Fire Insurance and MRI (if available and applicable)
c.) With Lock Box Arrangement – all payments of the buyers under the CTS (cash or PDCs) shall be deposited in a non-drawing account with OFBank (formerly Postbank) exclusively for servicing of the CTS financing loan. Any withdrawals by the Developer shall require prior clearance and consent of OFBank (formerly Postbank)
a.) Fire insurance coverage to be secured upon 100% completion of unit and shall be based on the insurable value declared by the developer.
b.) Credit Life Insurance/ Mortgaged Redemption Insurance (if applicable).
Fees and Charges
Within Metro Manila / Branch Area – ₱3,600.00 –
Outside Metro Manila / Branch Area – ₱4,500.00 or actual whichever is higher
Note: A fee of ₱500.00 will be charged for every additional property within the same location
|Processing / Service Fee||₱1,000.00 or 1/10 of 1% of the approved amount whichever is higher but not more than ₱5,000.00|
|Handling Fee||½ of 1% of the approved loan amount / Not applicable to credit line renewals|
|Third Party Fees:|
|Documentary Stamp Tax||₱1.50 for every ₱200.00 of approved loan amount|
MRI: Based on the loan value
Fire: Based on appraised value of improvements
All Risks Insurance: Based on appraised value of improvements
|Notarial Fee||Dependent on the nature of the document and based on the prescribed IBP rates|
|Collateral Registration Fees||Dependent on the approved loan amount and standard Registration of Deeds (RD) fees|
|CONDITIONAL FEES (UPON OCCURENCE):|
|Commitment Fee||½ of 1% of the undrawn balance, to be collected if no drawdown was made within the required period. Not applicable to Revolving Credit Line (RCL)|
|Pre-Termination Fee||3% of outstanding balance terminated within the term of the loan|
|Cancellation Fee||₱250.00 per title released|
|Penalty||2% per month on amortization in arrears|
₱200 to cover cost of administrative expenses
|Bank Guarantee – Fee||½ of 1% of the total amount in the guarantee letter|
|Bank Statement – Fee|
₱30 per page upon request of the client except the monthly statement issued by the bank
Minimum Qualifications / Eligibility
A developer that is engaged in the business of development and sale of real properties shall be accredited by OFBank (formerly Postbank) as a requirement for granting of a CTS financing facility. Accreditation of Developer for Purchase of CTS Receivables shall be approved by the appropriate credit authority as authorized by the Board of Directors.
- Application Letter
- Corporate documents
- Financial documents
- Other as maybe required
For more information, please feel free to call or visit your nearest or preferred OF Bank Branch.