The State Bank of Viet Nam has called for the implementation of a VND120 trillion (US$5.11 billion) housing credit package to be sped up.

The package covers social housing development, homes for workers and renovation of degraded apartments with preferential interest rates around 1.5-2 per cent lower than the average rate of four State commercial banks.

Minister-Chairman of the Government Office Tran Van Son said that the Ministry of Construction would soon issue lists of projects and criteria for the preferential loans.

Deputy Governor of the State Bank of Viet Nam Pham Thanh Ha said at the Government’s meeting on Monday that the central bank this month sent documents to its branches and relevant commercial banks about the package, stating that lenders would be four State commercial banks, including Agribank, BIDV, Vietcombank and VietinBank.

The preferential loans would be provided to developers and buyers of social housing projects, housing projects for workers and projects to renovate old apartment buildings.

For developers, the preferential rate would be applied for a period of three years from the date of disbursement and five years for homebuyers.

Ha said that the disbursement would be until the end of 2030. Banks would be in charge of arranging capital for the lending, he said, adding that other banks who wanted to join the programme would be encouraged provided that they complied with the regulations.

The central bank said that the interest rate would be 8.7 per cent per year on the developers, 8.2 per cent on homebuyers, applicable till the end of June, which were around 1.5 – 2 per cent lower than the average rate of four State commercial banks. From July 1, the central bank would announce the preferential rates every six months.

When the period for preferential rates expired, the rate would be agreed upon by commercial banks and customers in accordance with the provisions of the laws and defined clearly in the agreements.

The central bank asked four lenders to speed up the disbursement of the package from this month and issue guidance to ensure consistency.

Deputy Governor of the State Bank of Viet Nam Dao Minh Tu previously stressed the importance of consensus among banks in implementing this credit package. Each borrower could borrow only once for one affordable home to ensure fairness, he said.

The credit package was a part of the effort to implement the Government’s Resolution No 33/NQ-CP dated March 11 about several solutions to remove difficulties and promote the safe, healthy, and sustainable development of the real estate market.

One million affordable homes

Deputy Prime Minister Tran Hong Ha on Monday signed Decision No 388/QD-TTg to approve a project of developing at least 1 million affordable homes for low-income earners and workers in industrial zones in the 2021-30 period.

The project targeted that around 428,000 apartment units would be completed in the 2021-25 period and another 634,200 in 2025-30.

The Ministry of Construction said that the focus would be placed on improving the institution and legal system for social housing and housing projects for workers, completing planning and arranging land fund for social housing development.

In addition, incentives for developers would be more practical to encourage them to invest in social housing development.

Policies would be raised for developing homes for rent for workers.

Around VND849.5 trillion was needed to achieve the goal of social housing development by 2030, with most coming from private investment, the ministry said.

Localities must have the responsibility to make public information about land funds for social housing development to call for investment. — VNS