'Promote' disbursement of 145,000 billion VND loan package for social housing purchase

The State Bank of Vietnam (SBV) has just issued công văn 55/NHNN-TD requesting nine commercial banks to urgently implement the VND 145,000 billion credit package for loans to purchase social housing.

HUD's social housing is part of the Chánh Mỹ Ecological Urban Area Project in Bình Dương province.

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

Regarding the implementation of the Social Housing Loan Program, worker housing, and the renovation and reconstruction of old apartment buildings according to Resolution 33/NQ-CP, a representative of the State Bank of Vietnam stated: Outstanding loans for social housing will not be included in the credit limit of banks.

This policy will be implemented until 2030 at the latest, and the loan volume will not exceed the amount that commercial banks have registered to participate. If a commercial bank does not wish to implement this policy, it must send a written request to the State Bank of Vietnam (SBV) through the Department of Credit for Economic Sectors before January 15th for monitoring and compilation. The SBV requires commercial banks to continue reporting monthly on the lending situation to customers under the Social Housing Loan Program.

HUD's social housing project in Binh Duong.

According to the Ministry of Construction, based on reports from localities, from 2021 to the present, 644 social housing projects have been implemented nationwide, comprising 580,109 units. Of these, 96 projects with 57,652 units have been completed; 133 projects with 110,217 units have commenced construction; and 415 projects with 412,240 units have received investment approval.

Regarding the 120,000 billion VND (now 145,000 billion VND) support fund under Government Resolution 33, only 36 out of 63 provincial People's Committees have so far issued documents announcing eligible projects for preferential loans on their electronic portals. Of these, only 16 projects have received loans with a total committed credit amount of 4,200 billion VND and outstanding debt of 1,727 billion VND.

After more than a year of implementation, the above credit package has a very low disbursement rate because the interest rates and loan conditions are not truly preferential for low-income urban residents and industrial zone workers. For homebuyers, as of the end of Q3/2024, the 120,000 billion VND fund had disbursed approximately 150 billion VND to homebuyers in 12 projects...

Previously, the Governor of the State Bank of Vietnam, Nguyen Thi Hong, issued Decision 2690/QD-NHNN/2024 on the interest rate 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 0.1%/year lower than the 4.8%/year rate in 2024.

To boost funding support for social housing development, the Ministry of Construction has submitted to the Government a draft Resolution on preferential funding for social housing development. Accordingly, the Ministry has proposed a preferential loan package of VND 100,000 billion from government bonds, applicable over 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 plan 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 VND 100 trillion credit package, the State budget needs to allocate approximately VND 16,500 billion annually for the years 2025-2029 and approximately VND 17,500 billion for 2030. The Government needs to assign the Ministry of Finance to review and assess the feasibility of issuing government bonds to provide capital to the Social Policy Bank (SPB). This will create a source of funding for the bank to lend for the purchase, lease-purchase, construction, renovation, and repair of social housing.

This proposal was put forward by the Ministry of Construction amidst a situation where housing prices in general, and social housing in particular, are showing signs of "heated" increases in most localities, exceeding the financial capacity of the majority of the poor and low-income earners. Meanwhile, financial and credit support policies for both social housing developers and homebuyers are facing difficulties.

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