Proposing a support package of 110,000 billion VND, interest rate below 5%/year to build social housing

According to HoREA, the basis for the above proposal comes from the fact that the interest rate of the current VND120,000 billion credit package is not really preferential.

Specifically, the VND120,000 billion credit package sourced from commercial banks is being deployed to lend to social housing investors and residents. This package has a preferential interest rate of about 7.7%/year (for home buyers and renters) and 8.2%/year for social housing investors.

“ The interest rate of this package is 1.5-2% lower than the normal commercial loan, which has partly supported buyers, renters of social housing and investors, but in fact it is not yet preferential credit, because it is still higher than the previous social housing loan. The preferential period is also short (5 years) and the interest rate is adjusted every 6 months, causing insecurity for borrowers, ” emphasized Mr. Le Hoang Chau - Chairman of HoREA.

HoREA proposes to re-study the 110,000 billion VND preferential loan package for social housing.

Therefore, to achieve the goal of building at least 1 million social houses in the 2021-2030 period, HoREA proposed that the Ministry of Construction continue to coordinate with the State Bank, the Ministry of Planning and Investment, and the Ministry of Finance to develop a preferential credit package for social housing worth VND110,000 billion.

In fact, this 110,000 billion package was proposed by the Ministry of Construction to the Government and the National Assembly in February. In particular, the preferential interest rate for social housing loans is 4.8-5% per year, applicable for 2023 and the maximum loan term is 25 years (similar to the previous 30,000 billion package).

At the same time, this package will allocate about 50% for investors of social housing projects and workers' housing projects to get preferential loans; the rest will be for buyers and renters of social housing and workers' housing. The initial idea was that this package would be taken from the refinancing source and provided to commercial banks for loans, but later, the Ministry of Construction said it would no longer propose this option.

Regarding credit support policies for buyers and investors of social housing, according to HoREA, there are still a series of problems that have prevented investors of social housing projects and buyers and renters of social housing from enjoying preferential loan policies under the social housing development policy, which has been applied since 2015.

For individual customers who buy or rent social housing, HoREA said most have to take out commercial loans with interest rates of about 9-10% per year.

For businesses, this association also affirmed that social housing project investors have not been granted preferential credit loans as stipulated by the 2014 Housing Law. Commercial banks are allowed to provide preferential loans to individuals and households building or repairing houses, but are not allowed to provide loans to investors; individuals buying or renting social housing are also not allowed to receive preferential loans. At the same time, the Social Policy Bank is also not allowed to provide preferential loans to social housing project investors, according to the provisions of Decree 100 of 2015.

Therefore, in the period 2015-2020, according to HoREA, all investors of communal housing projects must borrow at commercial interest rates of 9-14% per year.

Chau Anh

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