Good news for homebuyers: A new 30 trillion VND loan package is coming soon.

State-owned commercial banks must allocate at least 3% of their outstanding loan balance to affordable housing loans at interest rates no lower than 50% of market rates.

This information was revealed by Mr. Nguyen Tran Nam - former Deputy Minister of Construction and Chairman of the Vietnam Real Estate Association - at the Vietnam Real Estate True Value Forum, held on the morning of April 20th in Hanoi.

Mr. Nguyen Tran Nam stated that the 30,000 billion VND loan package for low-income homebuyers and social housing, implemented by the State Bank of Vietnam, has officially closed, as the number of signed contracts has exceeded the 30,000 billion VND limit.

However, loan contracts already signed within the framework of the 30 trillion VND package will continue to be disbursed at a low interest rate of 5%. This directive was issued by the Prime Minister in the Resolution of the Government's regular meeting in March.

However, Mr. Nam believes that those who need to buy social housing or low-cost commercial housing should not be overly worried. "Support for the poor to buy low-cost housing or social housing has been officially included in the Housing Law and Decree 100 on the development of social housing," Mr. Nam stated.

Four state-owned commercial banks must allocate at least 3% of their outstanding loan balances to social housing and low-cost commercial housing loans at low interest rates.

Accordingly, state-owned commercial banks must allocate at least 3% of their outstanding loans to social housing loans, with interest rates no lower than 50% of market rates. Given current commercial loan interest rates for home purchases, this could be around 5% per year – equivalent to the 30 trillion VND loan package.

"Currently, the five commercial banks have a total outstanding loan balance of over 1 trillion VND, meaning they always allocate around 30,000 billion VND for lending," the former Deputy Minister of Construction calculated.

Mr. Nam also stated that the State Bank of Vietnam has implemented and designated four state-owned commercial banks, including Agribank, Vietcombank, VietinBank, and BIDV, to comply with this law. Simultaneously, the regulatory body has issued Circular 25 guiding eligible borrowers, methods of price compensation, and lending procedures.

The second source of funding, as stipulated in the Housing Law, is the Social Policy Bank, which is responsible for providing loans to poor households to purchase social housing, with 50% of the loan capital coming from the state budget and 50% from mobilized funds.

"Therefore, instead of the 30 trillion VND package, there will be two loan packages with no size or term limits and low interest rates for buyers of social housing and low-cost commercial housing. So, those who need to borrow to buy a house can rest assured," Mr. Nguyen Tran Nam affirmed.

Launched in 2013, as of March 20, 2016, according to statistics from the State Bank of Vietnam, banks had committed to lending VND 30,691.9 billion. The cumulative amount disbursed up to March 20 was VND 21,886.9 billion.

The 30 trillion VND package involves 19 commercial banks, including: Agricultural Bank of Vietnam (Agribank), Vietnam Investment and Development Bank (BIDV), Vietnam Foreign Trade Bank (Vietcombank), Vietnam Industrial and Commercial Bank (VietinBank), Vietnam Public Bank (PVcomBank), Vietnam Export Import Bank (Eximbank), Saigon Hanoi Bank (SHB), Tien Phong Bank (TPBank), Saigon Bank (SCB), Nam A Bank, Southeast Asia Bank (SeaBank), Vietnam Prosperity Bank (VPBank), Orient Commercial Bank (OCB), LienVietPostBank, Vietnam Commercial Bank (VietBank), Vietnam International Bank (VIB), National Commercial Bank (NCB), Bao Viet Bank, and Asia Commercial Bank (ACB).

According to Infonet