No bank loans when buying future housing

Circular 22/2023 of the State Bank, effective from July 1, 2024, stipulates that commercial banks and foreign bank branches are only allowed to lend to individuals to buy completed houses for handover, i.e. available houses.

In case an individual borrows credit to buy commercial housing secured by real estate which is the commercial housing itself, the credit institution is only allowed to lend for the case of commercial housing that has been completed for handover (available commercial housing).

Mr. Le Hoang Chau - Chairman of the Ho Chi Minh City Real Estate Association (HoREA) - said that the above regulation does not allow commercial banks and foreign bank branches to lend to people to buy unfinished commercial housing for handover (ie commercial housing formed in the future) secured (mortgaged) by that house itself.

Therefore, individuals who want to borrow credit to buy future commercial housing must take other security measures, or secure with other assets.

Không được vay ngân hàng khi mua nhà ở hình thành trong tương lai - 1 — Future housing cannot be borrowed from banks, according to new regulations of the State Bank (Illustration photo: Hai Long).

Mr. Chau said that if the above details are not amended immediately before the Circular takes effect, this regulation could lead to bad consequences, causing difficulties and hindering the normal operation of the real estate market, negatively affecting the recovery and development process of the market both in the short and long term.

Because not allowing credit institutions to lend credit to individuals to buy future commercial housing secured by the mortgage of that house is inappropriate, inconsistent, and not consistent with the provisions of the 2015 Civil Code as well as current laws and newly passed laws.

He analyzed that an individual purchasing a future commercial house and taking measures to secure the performance of obligations by mortgaging the future commercial house is a legal civil transaction stipulated in the 2015 Civil Code.

The measure to secure a loan under this regulation is to mortgage the secured assets, which can be existing assets or assets formed in the future, so commercial housing formed in the future can be used as secured assets.

The purchase of future commercial housing by an individual and the implementation of measures to secure the performance of obligations by mortgaging the future commercial housing is also a legal transaction, in accordance with the provisions of the Housing Law 2014, Housing Law 2023, Real Estate Business Law 2023, Investment Law 2020, Law on Credit Institutions 2024...

Therefore, HoREA proposes to add a regulation allowing credit institutions to lend to individuals to buy future commercial housing secured (mortgaged) by the house itself. This regulation applies to both cases of buying commercial housing or social housing, with available housing or housing formed in the future.

Source