Is there any truth to the new regulations imposed by Decree 22/2023 on real estate?

The Head of Legal Affairs (State Bank) asserts that the provisions in Circular 22/2023 do not restrict the use of future real estate assets as collateral for home loans.

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In late 2023, the State Bank issued Circular No. 22/2023 SBV amending and supplementing some provisions of Circular No. 41/2016 SBV on capital adequacy ratio for banks. Circular 22/2023 takes effect from July 1, 2024. 

Leaders of the Legal Department (State Bank) affirm that the provisions in Circular 22/2023 do not limit the mortgage of real estate formed in the future to borrow for housing.

However, recently, the real estate market has been stirred up when the Ho Chi Minh City Real Estate Association (HoREA) “discovered” Circular No. 22/2023, which is understood as “not allowing individuals to borrow credit to buy commercial housing formed in the future, secured by that same house…”. 

In particular, HoREA stated that Circular 22/2023 amends Article 11, Clause 2 of Circular 41/2016 regarding secured loans by real estate for individuals to purchase houses that have been completed and delivered under the purchase contract.

HoREA believes that this provision makes many people who need to borrow money to buy houses understand that commercial houses formed in the future will not be accepted by commercial banks as collateral for borrowing. 

“Thus, Circular 22/2023/TT-NHNN does not allow commercial banks, branches of foreign banks to lend individuals to buy “commercial houses that have not been completed and delivered (meaning commercial houses formed in the future)” to be secured by that same house, so individuals who want to borrow credit to buy “commercial houses formed in the future” must implement other security measures or secure with other assets” – HoREA concludes. 

Therefore, this association has sent a letter to the State Bank, requesting amendment and supplementation of Article 11, Clause 2 of Circular 41/2016/TT-NHNN (amended and supplemented in Clause 1, Article 1 of Circular 22/2023/TT-NHNN) before Circular 22/2023/TT-NHNN takes effect from July 1, 2024. Otherwise, it may lead to bad consequences, difficulties, and obstacles to the normal operation of the real estate market, negatively affecting the recovery and development process of the real estate market in the short and long term. 

On January 31, in an interview with Báo Người Lao Động, leaders of the Legal Department (State Bank) affirmed that the provisions in Circular 22/2023 do not limit the mortgage of real estate formed in the future to borrow for housing. Article 1 of Circular 22/2023 mentions “Completed houses delivered under the purchase contract” – it is just a definition for commercial banks to determine the mortgage loan is a house. Therefore, commercial banks still accept commercial houses formed in the future as collateral assets for borrowing to purchase that house.

SOURCEcafef
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