Prime Minister requests 30,000 billion VND package for social housing in October

According to the conclusion announcement of the Government Office on the 10-year conference on social housing development, Prime Minister Pham Minh Chinh requested the construction of a new credit package of VND30,000 billion for borrowers to buy, rent, build or renovate this type of housing. The Ministry of Construction was assigned to preside over the research, to be completed in October.

The resources of this credit package come from the local budget and about 15,000 billion VND from government bond issuance. Thus, the capital of the 30,000 billion VND package comes from the state budget, different from the resources of the 120,000 billion VND package supported by commercial banks.

Previously, at the end of May, the Ministry of Construction proposed that the State Bank study a new preferential loan package for social housing buyers, with interest rates 3-5% lower than commercial loan interest rates, with a term of 10-15 years. This proposed interest rate is softer than the VND120,000 billion preferential credit package currently being implemented (1.5-3% lower than commercial loan interest rates).

"This incentive package will create more motivation for low-income people and industrial park workers to borrow money to buy houses," the ministry said.

According to the report of the Ministry of Construction, after more than a year of implementation, the disbursement of the 120,000 billion VND package is still very low, nearly 1% or about 1,344 billion VND. Of this, 1,295 billion VND is for investors in 12 projects, the rest is for home buyers.

In addition to the four state-owned commercial banks, TPBank, VPBank, MBBank and Techcombank are now participating with VND5,000 billion each, bringing the total interest rate support capital to VND140,000 billion.

The delay in disbursing this preferential credit package is assessed by many experts to affect the progress of completing the project to build one million social houses. As of mid-July, the whole country had 79 completed projects with nearly 40,700 houses. If including projects that have started and completed, the whole country has reached nearly 36% of the target by 2025.

In Hanoi and Ho Chi Minh City, the construction of social housing is still slow, less than 40% of the target. For example, Hanoi must build 18,700 units by 2025, but only 3 projects have started construction (1,700 units) and 5 projects have been completed, about 5,200 units, reaching nearly 37% of the target.