A view of low-cost apartment buildings for low-income earners in Ha Noi's Gia Lam District. The Government-subsidised low-cost housing scheme is for low-income earners, but there is evidence that many people with considerable assets are fraudulently taking advantage of this scheme. — VNA/VNS Photo Tuan Anh

The programme was set up to provide homes for low-income earners, but there is evidence that many people with considerable assets are fraudulently taking advantage of the scheme.

Duc said that the trend had become popular since the Government relaxed conditions for low-income earners to lease or purchase affordable housing.

Few developers want to invest in low-cost housing because of low returns . This led the Government to offer incentives to get them involved in affordable housing, according to Kinh te & Do thi (Economic and Urban) newspaper.

In 2013, Viet Nam implemented a VND30 trillion (US$1.43 billion) national real-estate bailout package, offering preferential yearly interest of six per cent for low-income citizens to lease or buy homes.

The homes must measure less than 70 sq.m and cost less than VND15 million ($714 ) per sq.m.

There are also provisions allowing developers to get preferential loans to build the low-cost houses.

Since last November, low-income earners purchasing privately-built houses worth VND1.05 billion ($50,000 ) or less in approved urban projects have been entitled to financial assistance from the $1.43 billion national real-estate bailout programme.

Duc said that some developers undercharged for premises in written contracts so that they and the buyers qualified for the bailout package.

However, buyers still had to pay the real price of the premises.

Duc said that it was difficult to apprehend those committing the fraud as both parties colluded with each other to hide the real price.

Violations were recently detected in high-end housing projects, where the contract prices written down were much lower than they should have been.

Last week, the media reported that tens or billions of Vietnamese dong from the bailout package had been misused by home buyers and developers circumventing the law.

A home buyer in Ha Noi's Ha Dong District said that he spent almost VND1.2 billion ($55,000 ) to buy a 61sq.m apartment with a dining room, two bedrooms and two toilets, but the contract only showed VND 590 million ($27,000).

He later paid the extra money to the developer.

He said that the developer advised him to do this to take advantage of the bailout programme.

Vice chairman of the Civil Engineering Federation, Pham Sy Liem, said it was possible that home sellers, buyers and banks were all involved in the disbursement of preferential loans under real-estate bailout programme.

He said that banks were legally bound to take final responsibility for checking for fraud because it was their job to assess projects and decide on whether to make loans.

Nguyen Thanh Ha, a lawyer with SBLaw, said the Construction Ministry had issued circular 07/2013/TT-BXD that outlines punishment for those defrauding the scheme.

It states that individuals and organisations found cheating will be fined, forced to return their loans and terminate their credit contract with banks.— VNS