Nghe An officially offers loans to buy social housing with interest rate of 4.8%/year

Loan package implementation guide

Mr. Nguyen Van Vinh - Deputy Director of the Provincial Social Policy Bank said: Implementing Decision No. 1571/QD-NHCS dated March 3, 2018 of the General Director, we are organizing the implementation of the social housing loan program according to Decree 100/2015/ND-CP dated October 20, 2015 of the Government, with the initial capital target of 10 billion VND. Currently, the capital has been allocated to districts and towns. After being allocated capital, the Social Policy Bank organized a training conference on credit operations to guide loans for renting and buying social housing; building new houses, or renovating and repairing houses for living according to Decree 100/2015/ND-CP.

It is known that after assigning additional credit plan targets and the results of assigning entrusted capital from the provincial budget in 2018 to Nghe An Branch, the Board of Directors of the Provincial Bank for Social Policies has decided to assign credit plan targets. Currently, district-level transaction offices are advising on allocating capital to commune levels and implementing procedures according to regulations to quickly bring capital to the right beneficiaries in the shortest time.

The demand for loans to buy social housing is very high but the source is limited.

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According to Decree No. 100/ND-CP and instructions of the Vietnam Bank for Social Policies, the subjects eligible for loans include: people with revolutionary contributions according to the provisions of the law on preferential treatment for people with revolutionary contributions; low-income people, poor and near-poor households in urban areas; workers working in enterprises inside and outside industrial parks; officers, professional non-commissioned officers, technical non-commissioned officers, professional soldiers, workers in agencies and units of the People's Public Security and the People's Army; cadres, civil servants and public employees according to the provisions of the law on cadres, civil servants and public employees.

Except for those who have contributed to the revolution, the remaining subjects to be eligible for loans must not be subject to regular income tax according to the provisions of the law on personal income tax.

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When borrowing capital from the Social Policy Bank, the borrower must meet the conditions such as making monthly savings deposits at the bank with a minimum deposit period of 12 months from the date of signing the Credit Contract with the Social Policy Bank. The minimum monthly deposit is equal to the borrower's monthly repayment.

In addition, the borrower must have sufficient equity capital of at least 20% of the value of the Social Housing Purchase/Lease-Purchase Contract for loans to purchase/lease-purchase social housing; at least 30% of the estimated value or cost calculation plan for loans to build new or renovate, repair houses. The maximum loan amount is 80% of the value of the social housing purchase or lease-purchase contract.

Capital disbursement at Nghi Long commune transaction point (Nghi Loc).

The minimum loan term is 15 years and the maximum is not more than 25 years from the date of first loan disbursement. In case the borrower needs to borrow with a term lower than the minimum loan term, he/she must negotiate with the Social Policy Bank where the loan is made on a lower loan term.

What is the loan procedure?

The Social Policy Bank conducts entrusted lending through socio-political organizations. To get a loan, borrowers must join the Savings and Loan Group (S&L) and register for a loan at the S&L Group where they legally reside. The Group Management Board collects needs, organizes a public review meeting witnessed by the Village Chief and the commune-level association. The results of the review meeting at the Group are recorded in the Minutes and a list is made and sent to the Commune-level Poverty Reduction Board.

Due to the small initial capital and large loan demand, the Commune-level Poverty Reduction Committee compiles a list of loan requests submitted by the Savings and Credit Groups, organizes scoring according to the prescribed scorecard, and compiles a list of loan requests corresponding to the allocated capital and sends it to the Vietnam Bank for Social Policies as a basis for lending.

At the lending bank: Upon receiving the loan application from the Savings and Loan Group, the lending bank notifies the borrower to come and complete the loan procedures and bring the loan application. The credit officer will assess the completeness, legality and validity of the loan application, prepare an assessment report and proceed with the steps to sign the contract with the borrower.

Based on the credit contract signed between the borrower and the People's Credit Fund where the loan is made, the borrower opens a deposit account to deposit monthly savings according to regulations and makes the deposit from the month of signing the credit contract.

After the loan application is completed, the appraisal officer transfers it to the accounting department as a basis for disbursement according to schedule.