Who is eligible for interest rate differential compensation when purchasing social housing?
Prime Minister Nguyen Xuan Phuc has just signed a decision guiding the compensation of interest rate differences to implement the social housing loan policy according to Decree No. 100/2015.
According to the decision, the subjects eligible for interest rate differential compensation include the Vietnam Bank for Social Policies; credit institutions considered and decided by the State Bank of Vietnam from time to time; and subjects borrowing capital to invest in the construction of social housing according to regulations. In addition, there are subjects borrowing capital to buy, rent, hire-purchase social housing; build new or renovate, repair houses for residence according to the provisions of Decree 100.
Loans are funded by the State budget to compensate for interest rate differences when fully meeting the conditions of signed credit contracts and have been disbursed at credit institutions in accordance with the provisions of Decree No. 100.
In addition, the loan must be for the right purpose and the borrower must use the loan for the right purpose according to the provisions of law; the loan must be within the term at the time of interest rate difference compensation.
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| Some borrowers who buy social housing will be provided with interest rate subsidies. Photo:Tien Tuan |
In case loans (including principal and interest) are overdue or have their debt extended (except for loans at risk due to force majeure and have their debt extended according to regulations), no interest rate difference compensation shall be granted for the period of overdue or extended debt.
In case the borrower has paid off all overdue debt and the loan is determined to be back in due status (the customer repays the debt on time from the next repayment period), the customer will continue to be compensated for the interest rate difference according to regulations.
The interest rate difference subsidized by the state budget for credit institutions implementing housing program loans under Decree No. 100/2015 is 3%/year, applied in the period 2016-2020.
The Prime Minister's Decision also allows the Vietnam Bank for Social Policies to receive State budget compensation for interest rate differences and management fees when lending to invest in the construction of social housing, lending to buy, rent, hire-purchase social housing, build new or renovate, repair houses for housing according to the interest rate difference compensation mechanism according to current regulations.
