Ministry of Construction: Proposal to issue 100,000 billion VND in bonds for social housing loans

The draft resolution on preferential capital for social housing development, worth about VND100,000 billion from issuing government bonds, is being consulted by the Ministry of Construction with ministries and branches before being submitted to the Government for promulgation.

NHS Trung Van social housing project created a buying fever in mid-2023, but is still not completed - Photo: B.NGOC

Spending 16,500 billion VND each year on social housing

The resolution aims to ensure capital to implement the investment project to build at least 1 million social housing units for low-income people and industrial park workers in the 2021-2030 period.

Create conditions for everyone to have accommodation, provide housing support for social policy beneficiaries, low-income people, and the poor who have housing difficulties, contributing to political stability and ensuring social security.

The Ministry of Construction said that to implement the Government's project to build 1 million social housing units in the 2021-2030 period, capital of up to VND500,000 billion is needed.

To date, the Government has approved a credit package of 120,000 billion VND for loans to invest in and buy social housing with interest rates 1.5-2% lower than the average commercial loan interest rate of 4 state-owned commercial banks during the period.

However, the preferential credit package of 120,000 billion VND after more than 1 year of implementation has a very low disbursement rate because the loan interest rate and loan conditions are not really preferential for low-income people in urban areas and industrial park workers.

Therefore, the Ministry of Construction is drafting a resolution on preferential credit capital of 100,000 billion VND for the Bank for Social Policies to lend to buy, hire-purchase, build, renovate, and repair social housing.

The interest rate of the preferential credit package of 100,000 billion VND for loans to buy social housing is equal to the interest rate for poor households as decided by the Prime Minister in each period.

The disbursement period of the preferential credit package of VND 100,000 billion will last until the full disbursement of this credit package, but not exceeding December 31, 2030.

The allocation and disbursement of preferential credit packages for social housing development is expected to be implemented as follows: in the period 2025-2029, about 16,500 billion VND will be disbursed each year, and about 17,500 billion VND in 2030 alone.

Issuing government bonds to raise capital

To implement the preferential credit package of 100,000 billion VND, the Ministry of Construction proposed that the Government assign the Ministry of Finance to review and carefully and specifically evaluate the possibility of issuing government bonds to provide capital for the Social Policy Bank to lend for purchasing, leasing, constructing, renovating and repairing houses.

The Ministry of Planning and Investment coordinates with the Ministry of Finance and relevant ministries and branches to allocate government bond capital for social housing development.

In the process of appraising investment policies for industrial park infrastructure projects, it is necessary to appraise the allocation of land for the development of workers' housing according to the provisions of the Housing Law.

Regarding the State Bank, the Ministry of Construction proposed that the Government assign this agency to coordinate with the Bank for Social Policies to review and remove difficulties and obstacles to effectively implement the social housing support loan program.

Assign the Vietnam Bank for Social Policies to develop a project to issue government-guaranteed bonds, send a request for guarantee to the Ministry of Finance for submission to the Prime Minister for approval, grant government guarantees to the Vietnam Bank for Social Policies to organize the issuance of government bonds, and manage capital sources according to regulations.

Coordinate with the Ministry of Finance and the Ministry of Planning and Investment to prioritize the allocation of VND 100,000 billion for social housing development projects and home buyers.

The role of the state is growing

In October 2024, the Ministry of Construction held two meetings with the State Bank and one meeting with the Vietnam Bank for Social Policies in October 2024, before proposing the Government to issue a resolution to issue VND 100,000 trillion in government bonds for social housing development.

Previously, the Prime Minister requested the Ministry of Construction to coordinate with ministries and branches to study a preferential credit package for social housing development of about 30,000 billion VND, including 15,000 billion VND from government bond issuance and 15,000 billion VND from local budget capital entrusted for lending.

But the Ministry of Construction believes that assigning localities to allocate capital for social housing development will face many difficulties, and localities will have difficulty arranging resources to participate.

Furthermore, in addition to the social housing development program, localities are having to allocate budgets to implement programs to eliminate temporary and dilapidated houses in the area.

Source: https://tuoitre.vn/bo-xay-dung-de-xuat-phat-hanh-100-000-ti-dong-trai-phieu-cho-vay-nha-o-xa-hoi-20241201075446453.htm