RECOVER HOPE:  A Partnership Guarantee Fund for Safe Shelter

Thousands of families living in Cagayan de Oro City were hit by severe Typhoon Sendong (international name, Washi) on December 16, 2011.  In 2012, PEF and Cordaid partnered with local NGOs for RECOVER HOPE (Rebuilding Communities through Vibrant Economic Resilience for Houses, Organization, Peace and Enterprises). PEF directly supported three non-government organizations (NGOs), as Community Mortgage Program mobilizers, who organized the displaced households into shelter self-help associations and facilitated their access to housing finance and community development assistance.  These NGOs were the Growth, Organizational Upliftment of People (GROUP) Foundation, Technology Outreach and Community Help (TOUCH) Foundation and the Social Action Center of the Roman Catholic Archdiocese of Cagayan de Oro.

The Social Housing Finance Corporation (SHFC), a government corporation, is tasked to provide loans to community associations through a Community Mortgage Program to purchase and develop land for resettlement and for house construction.  However, the loan for land purchase from private landowners could be processed only with complete documents, which in a business-as-usual mode may take more than a year.  Thus, PEF and Cordaid set up a guarantee fund for SHFC to release at least 50% of the loan amount to the community associations with assurance that all loan documentation requirements will be submitted within a year for the balance 50% to be released.  The guarantee fund lets the SHFC release loan as an emergency quick-response bypass of its regular loan policy, so that the community housing associations can clinch the most crucial step, which is buying the land from private owners.  (See the Flow Chart below for a complete picture of the process, players and outputs of the PEF-Cordaid Guarantee Fund.)

By January 2014, through RECOVER HOPE, 14 community associations of 3,174 families in Cagayan de Oro City were covered by a Php 31.56 million guarantee by PEF and Cordaid to avail the Php 126.2 million in loan for purchasing land for safer settlements from SHFC.