ANTD.VN - The State Bank affirmed: Circular 22 does not restrict individuals from buying houses with mortgages on future houses. The condition of "completed houses according to the house purchase contract" only applies to home mortgage loans that are applied with a lower risk coefficient than other real estate secured loans.
Previously, the Ho Chi Minh City Real Estate Association sent a document to the Prime Minister and the State Bank, proposing to amend and supplement Clause 1, Article 1 of Circular No. 22/2023/TT-NHNN.
In particular, HoREA expressed deep concern about the regulation that commercial banks and foreign bank branches are only allowed to lend to individuals to buy houses that are "completed for handover" (ie available houses - according to HoREA).
HoREA believes that this means that Circular No. 22/2023/TT-NHNN does not allow commercial banks and foreign bank branches to lend to individuals to buy unfinished commercial housing for handover (ie commercial housing formed in the future) secured (mortgaged) by that house itself.
This association believes that if the above regulation is not amended immediately, when Circular No. 22 takes effect from July 1, 2024, it may lead to bad consequences, causing difficulties and hindering the normal operation of the real estate market, which will negatively impact the recovery and development process of the real estate market both in the short term and in the long term.
Circular 22 is not a document guiding credit granting operations.
Responding to this information, the State Bank affirmed that Circular 22 does not restrict individuals from buying houses with mortgages on future housing.
According to the State Bank, Circular 41/2016/TT-NHNN (amended and supplemented by Circular 22/2023/TT-NHNN) regulating the capital safety ratio of commercial banks and foreign bank branches is not a document guiding credit granting operations of credit institutions.
In particular, the Circular provides guidance on determining and applying risk coefficients to each type of bank assets (including real estate secured loans and home mortgage loans).
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Home buyers can still mortgage future housing |
Specifically, Clause 10, Article 2 of Circular 41/2016/TT-NHNN stipulates: “A loan secured by real estate is a loan to an individual or legal entity to purchase real estate, carry out a real estate project and is secured by the real estate itself , the real estate project formed from the loan according to the provisions of law on secured transactions”.
Circular 22/2023/TT-NHNN does not amend or supplement this content. Organizations and individuals who need to buy a house and secure (mortgage) this future house will apply a risk coefficient from 30% - 120% depending on the guarantee ratio (LTV) calculated by the ratio of the loan balance to the value of the collateral, in case there is no information about the LTV ratio, the risk coefficient is 150%.
Completed homes will be given a low risk rating.
Article 2, Clause 11 of Circular 41/2016/TT-NHNN stipulates: “A home mortgage loan is a loan secured by real estate for individuals to buy a house that fully meets the following conditions: a) The source of funds to repay the debt is not the source of funds for renting the house formed from the loan; b) The house has been completed according to the house purchase contract; c) The bank or foreign bank branch has full legal rights to handle the mortgaged house when the customer cannot repay the debt according to the provisions of law on secured transactions; d) The house formed from this mortgage loan must be independently valued (valued by a third party or by a department independent of the credit approval department of the bank or foreign bank branch) with the principle of prudence (the price is not higher than the market price at the time of loan approval) according to the regulations of the bank or foreign bank branch.”
Clause 1, Article 1 of Circular 22/2023/TT-NHNN amends and supplements Clause 11, Article 2 as follows: “11. A home mortgage loan is a loan secured by real estate for individuals to buy a house, including:
a) The loan secured by real estate for individuals to buy a house must meet the following conditions: i) The source of funds to repay the debt is not the source of funds for renting the house formed from the loan; ii) The house has been completed for handover according to the house sale and purchase contract; iii) The bank or foreign bank branch has full legal rights to handle the mortgaged house when the customer cannot repay the debt according to the provisions of the law on secured transactions and the law on housing; iv) The house formed from this mortgage loan must be independently valued (valued by a third party or by a department independent of the credit approval department of the bank or foreign bank branch) with the principle of prudence (the value is not higher than the market price at the time of loan approval) according to the regulations of the bank or foreign bank branch.
b) Loans for purchasing social housing and housing under Government support programs and projects are determined according to the provisions of the law on housing and meet the conditions at points a(i), a(iii), a(iv) of this clause".
Thus, home mortgage loans will include: Home mortgage loans to buy houses that meet the prescribed conditions, including the condition of completion for handover, and loans to buy social housing, buy houses under Government support programs and projects.
The risk factor applied to a home mortgage loan will vary from 20%-100% depending on the LTV and DSC ratio.
For loans to buy social housing, buy houses under the Government's support programs and projects, there is no need to meet the condition that the house has been completed for handover and the risk coefficient is lower than other housing mortgage loans at only 20% -50%, in order to implement the Government's policy of encouraging social housing.
Thus, the State Bank said that the condition of a completed house according to a house purchase contract only applies to home mortgage loans (which are subject to a lower risk coefficient than other receivables secured by real estate).
In case an organization or individual has a need to build or buy a future house and mortgages the future house, it will be a case of a loan secured by real estate as prescribed in Clause 10, Article 2 of Circular 41 and the corresponding risk coefficient as prescribed in Clause 10, Article 9 of Circular 41 will be applied.
“Thus, this regulation does not restrict the rights of organizations and individuals to buy future housing, and is not contrary to current regulations (Civil Law, Housing Law, Real Estate Business Law, Investment Law 2020, Law on Credit Institutions 2024)” – the State Bank affirmed.
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