The policy of providing loans for social housing purchases will continue to be applied from 2018.

Representatives from the Social Policy Bank announced that they will officially begin lending for social housing purchases in 2018. This is good news for those who want to borrow at preferential rates to buy social housing after a long period during which the 30,000 billion VND package was fully disbursed.

The dream is hard to reach now that the 30 trillion VND package has run out.

Ms. Nguyen Trang (Long Bien, Hanoi) recently got married, but both she and her husband had already prepared by saving money beforehand to buy a house after they moved in together. Having saved up some money, they were eagerly registering to buy a house in a project in Tam Trinh when the 30 trillion VND preferential credit package was fully disbursed.

"We had to wait for the next loan packages because our combined income is limited, and we didn't dare borrow money at market interest rates," Trang confided.

Decree 100/2015/ND-CP on social housing brought joy to many, including Ms. Trang and her husband. According to the decree, the Prime Minister decided that the interest rate for loans to purchase social housing through the Social Policy Bank would be only 4.8% per year. However, due to difficulties in allocating capital, this credit policy has not yet been implemented.

According to Mr. Le Hoang Chau, Chairman of the Ho Chi Minh City Real Estate Association, in reality, both developers and beneficiaries of social housing projects currently lack access to preferential credit sources, leading to significant difficulties.

For customers who signed contracts to purchase social housing but did not receive their homes in 2016 due to incomplete projects, from January 1, 2017 onwards, they are no longer eligible for the 30,000 billion VND preferential credit package and there are no alternative preferential credit sources available. These individuals must resort to commercial loans with high interest rates and collateral requirements, or borrow from private lenders at very high interest rates.

Meanwhile, developers of social housing projects still have to borrow commercially under stricter conditions (since June 1, 2016) to complete construction. Thus, both developers and homebuyers are facing difficulties.

There will be a "way out" in 2018.

Recognizing that the social housing loan/lease-purchase program is a highly humane program, eagerly awaited by society, the Social Policy Bank immediately began preparations after the Housing Law and government guidelines stipulated that the Social Policy Bank would provide loans for the social housing program. The Social Policy Bank then proceeded with the necessary steps to be ready to provide loans as soon as the government allocated funds for the program.

Mr. Nguyen Van Ly, Deputy General Director of the Social Policy Bank, said: “Currently, the Government has allocated 500 billion VND to the bank to implement this policy. The bank has also mobilized another 500 billion VND. In addition, many localities also plan to entrust lending for this program. In 2018, the Social Policy Bank will officially provide loans for purchasing/renting social housing.”

A point of interest to many is the regulation in Clause 5, Article 13 of Decree 100/2015/ND-CP: "Customers who are households or individuals borrowing preferential loans from the Social Policy Bank must make monthly savings deposits at the Social Policy Bank for a minimum of 12 months and at the deposit amount as stipulated by the lender."

Regarding this issue, Mr. Nguyen Van Ly stated that the Social Policy Bank has two methods: Firstly, lending first and then encouraging savings deposits; secondly, encouraging savings deposits first and then lending.

"Both methods are legal. Customers depositing savings need to understand clearly that this is not a savings activity for earning interest, but rather a savings activity for borrowers to create their own capital to participate in the loan project," Mr. Ly explained.

The Ho Chi Minh City Real Estate Association also proposed that the National Assembly, the Government, and the State Bank of Vietnam allocate approximately 1,000-2,000 billion VND annually during the 2018-2020 period to provide loans to beneficiaries of social housing, at an interest rate of around 4.8% per year. They suggested allocating this capital to the Social Policy Bank and four other credit institutions: Vietcombank, Vietinbank, Agribank, and BIDV, for implementation.

In the long term, the Association recommends that the National Assembly, the Government, and the State Bank of Vietnam establish a mechanism to implement preferential credit policies for investors in social housing projects as stipulated in the Housing Law, primarily for social housing projects for rent, similar to the Government's Resolution 02/NQ-CP dated January 7, 2013, in order to reduce the cost of social housing.

According to Hoang Duong/baotintuc