Social housing

'Urge' disbursement of 145,000 billion VND package for loans to buy social housing

TH (according to VNA) January 4, 2025 18:22

The State Bank has just issued an official dispatch requesting 9 commercial banks to urgently deploy a credit package of 145,000 billion VND for loans to buy social housing.

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HUD's social housing belongs to the Chanh My Ecological Urban Area Project, Binh Duong province

These banks are Agribank; Vietcombank; VietinBank; BIDV; TPBank; Techcombank; VPBank; MB; HDBank.

Regarding the implementation of the Program for lending for social housing, workers' housing, and renovation and reconstruction of old apartments according to Resolution 33/NQ-CP, a representative of the State Bank of Vietnam (SBV) said: Outstanding loans for social housing will not be included in the credit room (limit) of banks.

The maximum implementation period of this policy is until 2030 and the loan turnover must not exceed the amount that the commercial bank has registered to participate in. In case the commercial bank does not need to implement this policy, it must send a document to the State Bank through the Department of Credit for Economic Sectors before January 15 for monitoring and synthesis. The State Bank requires that on a monthly basis, commercial banks continue to report on the lending situation for customers under the Social Housing Loan Program.

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HUD social housing project in Binh Duong

According to the Ministry of Construction, through the synthesis of reports from localities, from 2021 to present, nationwide, 644 social housing projects have been implemented with a scale of 580,109 units. Of which, the number of completed projects is 96 projects with a scale of 57,652 units; the number of projects that have started construction is 133 projects with a scale of 110,217 units; the number of projects that have been approved for investment policy: 415 projects with a scale of 412,240 units.

Regarding the support capital of 120,000 billion VND (now 145,000 billion VND) according to Resolution 33 of the Government, so far only 36/63 provincial People's Committees have issued documents announcing projects eligible for preferential loans on the Electronic Information Portal. Of which, only 16 projects have been granted loans with a total committed credit of 4,200 billion VND, outstanding debt of 1,727 billion VND.

After more than 1 year of implementation, the above credit package has a very low disbursement rate because the loan interest rate and loan conditions are not really favorable for low-income people in urban areas and industrial park workers. For home buyers, by the end of the third quarter of 2024, the capital source of 120,000 billion has disbursed about 150 billion VND to home buyers in 12 projects...

Previously, SBV Governor Nguyen Thi Hong issued Decision 2690/QD-NHNN/2024 on the interest rates applicable in 2025 for housing support loans of commercial banks. The decision takes effect from January 1, 2025 and replaces the previous decision. This interest rate is reduced by 0.1%/year compared to 4.8%/year in 2024.

In order to promote capital support for social housing development, the Ministry of Construction has submitted to the Government a draft resolution on preferential capital for social housing development. Accordingly, the Ministry has proposed a preferential loan package of VND 100,000 billion from government bond capital, applicable for 5 years. This package is part of the VND 500,000 billion budget that the Ministry of Construction estimates is needed to implement the Government's Project to Build 1 Million Social Housing Units in the 2021-2030 period.

According to the draft Resolution, to ensure the continuous and effective implementation of the VND100,000 billion credit package, the State budget needs to allocate about VND16,500 billion each year for the years 2025 - 2029 and about VND17,500 billion for 2030. The Government needs to assign the Ministry of Finance to review and evaluate the possibility of issuing Government bonds to provide capital to the Vietnam Bank for Social Policies. From there, create a source of capital for this bank to lend to buy, hire-purchase, build, renovate, and repair social housing.

This proposal was made by the Ministry of Construction in the context of housing prices in general and social housing in particular showing signs of "hot" increase in most localities, exceeding the financial capacity of the majority of poor and low-income people. Meanwhile, financial and credit support policies for both social housing investors and home buyers are facing difficulties.

TH (according to VNA)
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'Urge' disbursement of 145,000 billion VND package for loans to buy social housing