Eligible investors of social housing projects in Ho Chi Minh City are not in a hurry to borrow the 120,000 billion package

With bank loan commitment, investor is not in a hurry

Ho Chi Minh City Department of Construction has just informed about the results of the implementation of the 120,000 billion VND credit program for preferential loans to develop social housing (NƠXH), workers' housing, and renovate and rebuild apartments according to Resolution No. 33/NQ-CP dated March 11, 2023 of the Government.

In early July 2023, the Ho Chi Minh City People's Committee announced 6 eligible projects with a total expected loan of VND 2,776.7 billion. Of these, there are 3 social housing projects for low-income people with a total expected loan of VND 910 billion; 1 social housing project for workers to rent with an expected loan of VND 700 billion; and 2 projects to renovate and rebuild apartments with a total expected loan of VND 1,166.7 billion.

According to the Ho Chi Minh City Department of Construction, as of October 17, of the 6 projects mentioned above, only the social housing project for workers to rent in the Industrial Park in Thanh My Loi Ward, Thu Duc City, invested by ThuThiemGroup Joint Stock Company (ThuThiemGroup Company), has been committed to receiving loans from the bank.

Specifically, BIDV Bank - District 7 Branch has appraised and agreed to provide credit to ThuThiemGroup Company under the 120,000 billion VND credit program with a maximum loan limit of 585 billion VND.

However, according to information from BIDV Bank, ThuThiemGroup Company has not yet had a need to disburse funds to implement the project, so it has not signed a credit contract and guarantee contracts with the bank as prescribed. This bank said that it will disburse funds after the project owner completes and provides all relevant documents.

Ho Chi Minh City Department of Construction said that ThuThiemGroup Company is currently borrowing capital from Tien Phong Bank and is supported under the 2% interest rate support program according to Decree No. 31/2022 and Circular 03/2022 of the State Bank to implement the project.

For the 5 projects eligible to access the 120,000 billion VND credit program, investors have contacted BIDV, Vietcombank, and Vietinbank branches in Ho Chi Minh City to register for loans. Currently, banks are evaluating the documents, and no projects have been granted credit loans.

Coal businesses find it difficult to borrow because banks have their own regulations.

Regarding the process of accessing the 120,000 billion VND credit program, a representative of a project investor said that when receiving appraisal documents to agree to grant credit to businesses, banks have their own regulations on loan conditions to ensure debt recovery.

According to this person, the bank's regulations for social housing and worker housing project owners require a certificate of land use rights. Meanwhile, according to the Land Law, organizations that are allocated land by the State without collecting land use fees do not have the right to mortgage.

Therefore, investors cannot use the social housing project land as collateral to borrow from banks but must use other assets even though the project has been cleared by the investor and converted to social housing project land according to the planning.

The representative of this enterprise also said that most social housing project investors, after having a decision to allocate land or change land use purpose, have not yet completed the procedures for granting certificates, so they are not eligible for loans.

According to the Ho Chi Minh City Department of Construction, another problem with the VND120,000 billion credit program is that the program only applies to four banks, including: Agribank, BIDV, Vietcombank and Vietinbank.

Meanwhile, during the project implementation process, investors have agreements with other banks to provide guarantee limits for contractors, construction units, home buyers, and guarantees for future housing sales contracts. Therefore, there will be differences in lending regulations between banks.

For projects to renovate and rebuild apartment buildings, in addition to the conditions under the guidance of the Ministry of Construction, banks require investors to have a land allocation decision and a construction permit before considering lending.

Faced with the above situation, the Ho Chi Minh City Department of Construction proposed that the City People's Committee propose that the Ministry of Construction take the lead and coordinate with the Ministry of Natural Resources and Environment and the State Bank to remove obstacles when implementing the VND120,000 billion credit program.