10-year interest rate incentive for low-income home loans

The interest rate for customers and businesses building or buying low-income houses in the first 3 years is expected to be 6%. Customers must commit to never receiving interest rate support from other banks.

The State Bank has just announced a draft Circular on Regulations on housing support loans under Resolution 02. Accordingly, the borrowers include low-income people, civil servants, public employees, and armed forces who can borrow to rent or purchase social housing; low-income people who can buy commercial houses with an area of ​​less than 70 square meters and a selling price of less than 15 million VND per square meter. Enterprises that build social houses or convert commercial houses to social houses are also eligible for the loan.

In addition to the home lease contract, the customer must have a loan request to buy or rent a single home and commit to never receiving interest rate support from other banks.



The expected interest rate for low-income home buyers is about 6% per year. Photo: Hoang Ha

5 commercial banks will have to reserve at least 3% of their total outstanding loans at the end of the previous year to lend to the above subjects. The lending interest rate is 6% per year for a period of 3 years from April 15, 2013. After April 15, 2016, the State Bank will announce appropriate lending interest rates to continue supporting customers who have borrowed capital.

The minimum loan term is 10 years, and the maximum interest rate support period is 10 years. By April 15, 2023, banks will have fully repaid the State Bank's refinancing loans and the remaining outstanding debt of customers at banks from this point on will be converted to loans using the bank's capital.

For customers borrowing to buy, rent, or hire-purchase a house, the minimum loan amount is 80% of the loan plan and 70% for businesses (customers have capital to participate in the loan plan according to bank regulations but not more than 20% for home buyers, renters, or hire-purchasers and 30% for businesses).

The draft regulation stipulates that banks consider and decide whether to grant loans with or without collateral in accordance with the provisions of law.

The State Bank will allocate a maximum of VND30,000 billion to support five commercial banks in providing housing support loans through refinancing. The refinancing disbursement period is from April 15, 2013 to April 15, 2016.

The State Bank's refinancing interest rate for banks for housing support lending purposes is 1.5% lower than the banks' lending interest rate for customers at the same time.

Real estate rescue is an important task stated in Resolution 02 issued by the Government on January 7, 2013 on solutions to remove difficulties for production and business, support the market, and resolve bad debts. Accordingly, the Government and ministries create the most favorable mechanism for real estate enterprises to release inventory, restructure products and access loans. Enterprises are also allowed to reduce and extend the payment schedule for land rent.

To stimulate demand in the market, the State Bank must direct state-owned commercial banks to reserve a reasonable amount of capital (at least about 3% of each bank's total outstanding loans) for low-income earners and civil servants to rent or buy houses. These people also have the opportunity to borrow low-interest loans from the refinancing source of about 20,000 - 40,000 trillion VND for a period of 10 years to rent or buy houses.

According to vnexpress - LY