Short answer. Yes, in the usual instalment arrangement. Property under a conditional sale on instalments, where the seller reserves ownership only to guarantee payment of the price, may be constituted as a family home. The reservation of title does not disqualify it.
What the law says
Nevertheless, property that is the subject of a conditional sale on installments where ownership is reserved by the vendor only to guarantee payment of the purchase price may be constituted as a family home.
Family Code, Article 156 — What Property May Be Constituted as a Family Home. Read the full provision →
The general rule, and why it seemed to exclude you
The article begins by requiring that the family home be part of the community or partnership property, or the exclusive property of a spouse with that spouse's consent, or — for an unmarried head of a family — his or her own property. Every branch of that rule speaks of property the family owns. A house still being paid off under a contract that reserves title to the developer is not yet owned by the buyer, which is why families in the most common housing arrangement in the country assumed the protection was closed to them until the last instalment cleared.
What the exception actually turns on
The word nevertheless opens the door, but on a condition worth reading closely: ownership must be reserved by the vendor only to guarantee payment of the purchase price. That is the ordinary instalment sale, where the seller keeps title as security and nothing more, and where the buyer is in possession, occupying the house and treating it as their own. It is the substance of the arrangement that matters, not what the contract is called. A different arrangement — a lease with an option to buy, say, where the occupant is a tenant rather than a buyer — is not the situation the exception describes.
It does not neutralise the seller
The exception lets the property be constituted as a family home; it does not rewrite the contract you signed. The seller's reservation of title exists precisely to secure payment, and the remedies stipulated for non-payment remain what they were. What the family home status protects against is the reach of other creditors, within the limits the law on family homes sets. Reading the provision as a shield against the very seller whose reserved title the sentence acknowledges is the misunderstanding to avoid, and it is a costly one to act on.
Keep the contract and prove you live there
Two things carry the point in practice. The contract itself, read for how title is held and why — a clause reserving ownership as security for the price is what brings you within the sentence. And evidence that the house is in fact the family residence and is actually occupied by the family, since a family home is a dwelling in use, not a parcel on a list. Keep the contract, the payment records, and the ordinary proof of residence together, and take them to a lawyer if a creditor moves against the house.
Cases citing this provision
These Supreme Court decisions cite the provision above. We list them so you can read them yourself; the summaries of what each decided are not ours to give.
- Urduja Ortiz-Aquino vs. Letecia Ortillo, Lisette Ortillo, And Sheriff Of The Office Of The Provincial Sheriff Of Lingayen, Pangasinan, G.R. No. 257235, November 8, 2023 — read the decision on LawPhil →
- Cesar D. Taruc vs. Angelina D. Maximo, Maricel Buenaventura, George Jordan, and Jennifer Burgos, G.R. No. 227728, September 28, 2022 — read the decision on LawPhil →