Vingroup, Techcombank propose social housing loan package with interest rate of only 4.8%/year

Proposal to pilot a VND8,010 billion loan package for social housing

Recently, the Ministry of Construction has sent a document to the Prime Minister proposing preferential credit sources for social housing development. On May 30, the Ministry of Construction worked with the State Bank, Vingroup Corporation, and Techcombank to clarify recommendations and proposals on preferential credit sources for social housing development.

Previously, on May 8, Vingroup and Techcombank signed a document to the Ministry of Construction proposing a credit program for social housing buyers. This loan package is applied to individuals who are eligible to buy social housing according to the list verified and provided by investors. They are lent up to 100% of the value of the social housing purchase contract.

These two "big guys" proposed a maximum loan term of 30 years and a loan interest rate based on the social housing loan interest rate of the Vietnam Bank for Social Policies in each period. Currently, the interest rate is 4.8%/year and fixed for the first 5 years. The collateral for the loan is the social housing project.

To implement this preferential loan program for social housing purchases, these two units proposed that the State Bank consider granting additional normal credit growth limits so that credit institutions can proactively expand their business to generate income to offset the interest rate difference spent to support people to buy social housing.

In terms of scale, this credit package is proposed to be piloted at VND8,010 billion. To create this financial source, the bank proposed to consider granting additional credit limits for 5 years from the start of the pilot, in addition to the limit announced by the State Bank at the beginning of the fiscal year to credit institutions.

These two enterprises also proposed that the Ministry of Construction support and create conditions for credit institutions to effectively participate in implementing the social housing development program.

A social housing project in Binh Duong (Photo: Khong Chiem).

Proposal to lower lending interest rates by 3-5%

The Ministry of Construction said that the proposal to pilot a new preferential loan package for borrowers to buy social housing by Vingroup and Techcombank has many similarities in the capital source of 120,000 billion VND.

Accordingly, this proposal targets individuals buying social housing. Meanwhile, the VND120,000 billion package provides additional support for investors of social housing projects, worker housing projects and individuals renting and buying social housing.

However, the interest rate for the proposed pilot program is 100% of the value of the social housing purchase contract. As for the 120,000 billion VND package, it is not regulated but banks will proactively implement it according to the law on credit.

The interest rate of the credit package proposed by the two enterprises to the Ministry of Construction is 4.8%/year, lower than the capital source of 120,000 billion VND. Currently, the interest rate for home buyers is 7.5%/year.

The loan term for the proposed credit package is up to 30 years and the first 5 years are preferential. The 120,000 billion VND package also applies preferential interest rates for home buyers for 5 years from the date of disbursement. The State Bank is also studying to extend the preferential loan period.

Based on the research, the Ministry of Construction proposed that the Prime Minister direct the State Bank to encourage more commercial banks outside the group of four state-owned commercial banks to participate in the loan program with a support capital of 120,000 billion VND.

In addition, we will continue to consider increasing the preferential loan term and lowering the loan interest rate by 3-5% compared to normal commercial loans so that industrial park workers and low-income people have the opportunity and motivation to buy houses.

The Ministry of Construction also recommended that the Prime Minister assign the State Bank to study and decide on credit growth limits for banks participating in supporting capital sources for social housing development, ensuring safety for credit institutions and the system of credit institutions according to law.

For the two enterprises that made the proposal, the Ministry of Construction recommended studying and adding the subjects of investors of social housing projects, projects for workers, and apartment building renovation projects that can borrow from this program.

Source: https://dantri.com.vn/bat-dong-san/vingroup-techcombank-de-xuat-goi-vay-nha-o-xa-hoi-lai-suat-chi-48nam-20240716220256470.htm