2025 needs about 16,500 billion
According to the Ministry of Construction, the resolution aims to ensure capital for the project to invest in building 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 facing 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. Therefore, the Ministry of Construction is drafting a resolution on preferential credit capital of VND100,000 billion for the Bank for Social Policies to lend to buy, hire-purchase, build, renovate and repair social housing.
Proposal to add credit package for social housing (photo: Nhu Y).
The interest rate of the preferential credit package of 100,000 billion VND for purchasing 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 100,000 billion VND is 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 2025, about VND 16,500 billion will be allocated; in 2026, about VND 16,500 billion will be allocated; in 2027, about VND 16,500 billion will be allocated; in 2028, about VND 16,500 billion will be allocated; in 2029, about VND 16,500 billion will be allocated; in 2030, about VND 17,500 billion will be allocated.
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.
According to the draft, it is proposed that the Ministry of Planning and Investment coordinate 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.
The Vietnam Bank for Social Policies develops a project to issue government-guaranteed bonds, sends a request for a guarantee to the Ministry of Finance for submission to the Prime Minister for approval, grants a government guarantee to the Vietnam Bank for Social Policies to organize the issuance of government bonds, and manages capital sources according to regulations.
The Ministry of Finance and the Ministry of Planning and Investment prioritize the allocation of VND 100,000 billion for social housing development projects and home buyers.
Localities must have specific mechanisms and solutions to shorten administrative procedures for project establishment, approval, land allocation, land lease, site clearance, construction investment procedures, etc. to support and encourage businesses to invest in construction projects, create supply for the market and take advantage of preferential capital sources for social housing development.
What are the old social housing loan packages like?
This is the first time the Ministry of Construction has proposed applying a social housing package by issuing bonds. Currently, social housing is using two capital sources: the VND120,000 billion package that commercial banks balance their own capital and capital deployed by the Policy Bank according to Decree 100 on social housing from the budget.
According to the Ministry of Construction, with a credit package of 120,000 billion VND for loans for investment and purchase of social housing with interest rates 1.5 - 2% lower than the average commercial loan interest rate of 4 state-owned commercial banks in the period. However, after more than 1 year of implementation, the preferential credit package of 120,000 billion VND has a very low disbursement rate because the interest rate and loan conditions are not really preferential for low-income people in urban areas and industrial park workers.
Currently, this loan package has an interest rate of 7%/year for investors and 6.5%/year for home buyers. As of the end of the third quarter of this year, the total outstanding debt was VND1,783 billion, of which corporate customers are eligible for loans. There have been 15 projects signing credit contracts with a total credit commitment of VND4,200 billion, with an outstanding debt of VND1,633 billion.
68 projects have not yet signed credit contracts for loans under the 120,000 billion VND program, of which 57 projects have investors who do not need to borrow capital and 6 projects are being appraised by commercial banks, 5 projects do not meet loan conditions.
For home buyers, by the end of the third quarter, the capital source of 120,000 billion VND had disbursed about 150 billion VND to home buyers at 12 projects.
Meanwhile, borrowing from the Social Policy Bank is 6.6%/year. This interest rate is also considered high compared to people's ability to pay.
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