Proposal to reduce interest rates for the 120,000 billion VND package to buy social housing

The State Bank has just submitted to the Government a draft resolution amending the VND120,000 billion loan package for social housing with a proposal to reduce interest rates on loans to buy social housing by 3% compared to the average interest rate of banks.

Information provided by Mr. Dao Minh Tu - Deputy Governor Bank The State - said at a press conference this morning (July 23), information on banking activities in the first 6 months of the year and implementation of tasks for the last 6 months of the year.

To assist borrowers in purchasing social housing, Mr. Tu said the State Bank has proposed to the Government interest rate cut home loan interest rate of 3% compared to the average interest rate of 4 state-owned commercial banks. Thus, the proposed preferential rate will increase by 1% compared to the current applied rate of 2%. The time to determine the loan interest rate is 3 months/time, shortened by half compared to the present.

"In addition, the loan period endow The program is also proposed to be 5 years instead of 3 years. After the next 5 years, interest rate "Lending rates will continue to be reduced, depending on the economic conditions at that time, but at least by 1-2% per year. It is not true that after 5 years, lending rates will be floating. Thus, people who borrow to buy social housing will be worried," Mr. Tu emphasized.

People will soon be able to borrow a 120,000 billion VND credit package to buy social housing at lower interest rates (photo: Ngoc Mai).

With preferential loan policies for businesses build and implementing social housing projects, according to Mr. Tu, is still applied as it is now. In addition, the State Bank encourages banks as well as large economic groups to promote social housing, creating conditions for low-income people to borrow to buy social housing.

More information on implementation results credit package, Ms. Ha Thu Giang - Director of the Department of Credit for Economic Sectors, State Bank - said that up to now, 34/63 provinces and cities have announced 78 social housing projects eligible for this credit package. The capital disbursed by commercial banks is 1,344 billion VND, of which 1,295 billion VND is for investors and 4.9 billion VND is for home buyers.

According to Ms. Giang, among the 78 projects in the list of projects eligible for loans under this credit package, many projects do not need loans. In addition, commercial banks have reported that there are projects that are still stuck in legal procedures such as site clearance, land use conversion, etc., so they are not eligible for disbursement.

The VND120 trillion credit package, which has been implemented since April, has had its interest rate lowered twice by the State Bank. Accordingly, businesses will receive a preferential interest rate of 8% per year and home buyers will receive a preferential interest rate of 7.5% per year. If the proposal is approved, people will receive an interest rate of 6.5% per year for 5 years.

According to statistics from the Ministry of Construction, from 2021 to now, the whole country has 503 social housing projects implemented with a scale of 418,200 units. Of which, 75 projects with a scale of 39,884 units have been completed; construction of 128 projects with a scale of 115,379 units has started. In addition, localities have also approved the investment policy of 300 projects with a scale of 262,937 units.

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