” The condition of the house being completed according to the purchase contract only applies to the loan secured by the house (applying a lower risk coefficient compared to loans secured by other real estate properties).
In case organizations or individuals need to build or purchase future homes that will be secured by the main house formed in the future, it will fall under the category of loans secured by real estate as specified in Section 10, Article 2 of Circular 41 and applicable risk coefficients as specified in Section 10, Article 9 of Circular 41.
Therefore, this provision does not limit the rights of organizations or individuals to purchase future homes, nor does it conflict with current regulations “, information from the State Bank confirms.
Specifically, Circular 41/2016/TT-NHNN (amended and supplemented by Circular 22/2023/TT-NHNN) regulates the capital adequacy ratio of commercial banks and branches of the State Bank, stating: Section 10, Article 2 of Circular 41/2016/TT-NHNN states: “Loans secured by real estate are loans for individuals or legal entities to purchase real estate, carry out real estate projects, and are secured by the real estate, the real estate project formed from the loans according to the provisions of the laws on collateral transactions”.
Circular 22/2023/TT-NHNN does not amend or supplement this content. Organizations or individuals who want to purchase and secure (mortgage) the main house formed in the future will apply risk coefficients ranging from 30-120% depending on the collateral ratio (LTV) calculated by the ratio of the loan balance to the value of the collateral, and in case there is no information on the LTV ratio, the risk coefficient is 150%.
Illustrative photo: Investment News
In addition, Section 11, Article 2 of Circular 41/2016/TT-NHNN states: “Loans secured by houses are loans secured by real estate for individuals to purchase houses that fully meet the following conditions:
Repayment funds are not rental income generated from the loan; Houses have been completed according to the house purchase contract. Domestic and foreign banks or their branches have full legal rights to handle mortgaged houses when customers fail to repay the debt, as stipulated by the laws on collateral transactions.
Houses formed from these secured loans must be independently appraised (by third parties or by a department independent from the credit approval department of the bank or its foreign branch) based on the prudence principle (the price should not be higher than the market price at the time of the loan approval), as stipulated by the bank or its foreign branch.”
Furthermore, Section 1, Article 1 of Circular 22/2023/TT-NHNN specifies: “1. Amend and supplement Section 11, Article 2 as follows: ’11. Loans secured by houses are loans secured by real estate for individuals to purchase houses.
Including loans secured by real estate for individuals to purchase houses that meet the following conditions: Repayment funds are not rental income generated from the loan; Houses have been completed and delivered according to the house purchase contract; Domestic and foreign banks or their branches have full legal rights to handle mortgaged houses when customers fail to repay the debt, as stipulated by the laws on collateral transactions and laws on housing…
For loans to purchase social housing or houses under government support programs and projects, the regulations of the laws on housing apply.
For loans secured by houses, they will include loans secured by houses to purchase houses that meet the specified conditions, including the condition of completion and delivery, and loans to purchase social housing or houses under government support programs and projects. The risk coefficient applicable to loans secured by houses will depend on each type and range from 20% to 100% depending on the LTV and DSC ratios.
For loans to purchase social housing or houses under government support programs and projects, which do not need to meet the condition of completion and delivery and have lower risk coefficients compared to other loans secured by houses, the risk coefficients range from 20% to 50%, in order to implement the government’s policy of promoting social housing.
