Official Dispatch No. 2308/NHNN-TD dated April 1, 2023 on implementing the loan program for social housing projects, etc. According to Resolution 33/NQ-CP, it is one of the solutions to remove and promote the Real Estate market. In that spirit, a credit package of VND 120,000 billion with preferential interest rates for social housing loans has been implemented by the State Bank of Vietnam.
1. Guidance content of Official Dispatch 2308/NHNN-TD
The official dispatch is detailed guidance from the State Bank of Vietnam in implementing social housing lending, etc. Points to note in the official dispatch’s content include:
Regarding the subjects of preferential loans, it is stipulated as:
– The customer is the project investor;
– Customer is the home buyer at the project;
Subjects need to meet the conditions to enjoy the above loan support policy. Home buyers are only allowed to borrow capital once to buy 1 apartment at a project in the list announced according to regulations.
Interest rates and preferential terms are specified as follows:
– For Investors: 8.7%/year, interest rate adjusted once every 6 months, term of 03 years.
– For home buyers: 8.2%/year, interest rate adjusted once every 6 months, term of 5 years.
2. Current status of implementing preferential credit packages for social housing loans
According to the Ho Chi Minh City Real Estate Association, with the loan interest rate specified above…This offer is more attractive to Investors than to Home Buyers. The association believes that the interest rates applied to home buyers are still very high with a 5-year term. After 5 years, if the bank applies commercial loan interest… The loan will become a burden for low-income borrowers and workers.
For real estate businesses, this incentive is an extremely necessary credit package. In the context of many real estate projects freezing due to lack of capital… This credit package both removes cash flow bottlenecks and encourages businesses to restructure their investment segments.
However, currently the number of social housing projects is not much. Capital is very important but there needs to be enough projects to absorb this capital. The VND 1,200 billion credit package is a driving force to encourage real estate businesses to start shifting to investing in social housing projects.
3. Recommendations to improve the policy on social housing development for employees
Ho Chi Minh City Real Estate Association believes that the Government needs to perfect the credit policy for social housing development… In the direction of identifying investment in housing development for low-income workers as an investment item in local medium and long-term capital. According to the Association, the loan interest rate suitable for low-income people is 5%/year, and the loan term is 25 years.
(Excerpt from Investment Newspaper dated 07/4/2023)
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