Ensuring a balance of multiple factors

Government Decree No. 100/2024/ND-CP dated July 26, 2024, details several provisions of the Housing Law regarding the development and management of social housing. Accordingly, the Vietnam Bank for Social Policies (VBSP) provides preferential loans for purchasing or lease-purchasing social housing and housing for the armed forces; and for constructing, renovating, or repairing housing, with interest rates equal to the lending rates for poor households as stipulated by the Prime Minister in each period. Recently, the VBSP adjusted the lending interest rate for purchasing, leasing, constructing, renovating, and repairing housing from 4.8% per year to 6.6% per year.

The new interest rate aims to reduce the burden on the state budget. Photo: DV

In accordance with Decree No. 100/2024/ND-CP, from August 1, 2024, the Vietnam Bank for Social Policies (VBSP) will increase the interest rate for loans to purchase or lease-purchase social housing, housing for the armed forces, and for the construction, renovation, or repair of housing from 4.8%/year to 6.6%/year. This new interest rate adjustment aims to ensure the sustainability of the lending program and reduce the burden on the State budget.

Decree No. 100/2024/ND-CP has introduced a series of notable changes related to social housing loans. One of the most significant changes is that the lending interest rate is adjusted according to the lending interest rate for poor households as stipulated by the Prime Minister in each period. The overdue interest rate is also set at 130% of the normal lending interest rate. This means that, with the current lending interest rate for poor households at 6.6%/year, the lending interest rate for social housing at the Social Policy Bank has increased by 1.8%/year compared to before.

Many argue that raising interest rates from 4.8% per year to 6.6% per year is a significant change, putting considerable pressure on social housing buyers. Furthermore, applying medium- and long-term interest rates similar to those for the poor could create anxiety for borrowers, as interest rates are likely to change frequently, even annually.

Mr. Nguyen Van Chung, Deputy Director of the Social Policy Bank of Kon Tum province, stated that the increase in lending interest rates from 4.8%/year to 6.6%/year was carefully considered and evaluated by competent authorities during the drafting of the Government Decree to ensure balance, stability, and long-term sustainability, with loan terms up to 25 years. The draft Decree has undergone extensive consultation with ministries, sectors, localities, and the public for refinement and approval before being submitted to the Government for promulgation as per regulations. At the conference summarizing 10 years of implementing Directive No. 40 on strengthening the Party's leadership over social policy credit, held on August 14th, the Prime Minister requested localities to prioritize allocating local budgets to the Social Policy Bank, especially for loans to create jobs and for social housing.

It is known that after nearly 10 years of implementing social housing loans, more than 49,000 low-income individuals and disadvantaged workers nationwide have borrowed nearly 21,000 billion VND to buy, rent, or build new social housing, contributing to ensuring social security and helping workers feel secure in production and economic development. According to Decree No. 100/2024/ND-CP, the eligible beneficiaries for preferential loans to buy, rent-to-own social housing, or to build, renovate, or repair housing include 8 categories: People with meritorious services to the revolution, relatives of martyrs who are eligible for housing improvement support according to the Ordinance on Preferential Treatment for People with Meritorious Services to the Revolution; Poor and near-poor households in rural areas; Poor and near-poor households in rural areas frequently affected by natural disasters and climate change; Poor and near-poor households in urban areas; Low-income individuals in urban areas; Workers and laborers employed in enterprises, cooperatives, and cooperative unions inside and outside industrial zones; officers, professional soldiers, non-commissioned officers of the People's Armed Forces, police workers, civil servants, defense workers and officials currently serving; cryptography personnel, other personnel working in cryptography organizations receiving salaries from the state budget, and cadres, civil servants, and public employees as prescribed by law on cadres, civil servants, and public employees.

Dac Vinh

Source: http://baokontum.com.vn/kinh-te/dieu-chinh-lai-suat-cho-vay-nha-o-xa-hoi-dam-bao-can-doi-nhieu-yeu-to-43187.html