More than 3,000 social housing units to be handed over
The Department of Construction of Ho Chi Minh City has reported to the city’s People’s Committee on the real estate market in 2023, including the situation of social housing (SH) development and the initial results of the implementation of the 120,000 billion VND preferential credit package.
In 2023, no new SH projects in Ho Chi Minh City were approved for investment. Only 1 SH project was granted a construction permit with a scale of 242 units. 6 SH projects are still being implemented, expected to supply about 4,000 apartments to the market.
Regarding the 120,000 billion VND preferential credit package, Ho Chi Minh City currently has 3 SH projects for low-income people and 1 SH project for eligible workers to borrow capital under this program. The total loan demand of these projects’ investors is 1,610 billion VND.
 Thủ Thiêm Green House, the first SH project in Ho Chi Minh City eligible for the 120,000 billion VND preferential credit package. Photo: C.T.V
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According to the Department of Construction of Ho Chi Minh City, the above 4 SH projects are expected to supply 3,058 apartments to the market. All 4 projects are scheduled to be completed and handed over in 2024, but no investor has been granted a loan from the 120,000 billion VND preferential credit package yet.
Among the 4 qualified SH projects, there is an SH project serving rented workers in Thanh My Loi Ward, Thu Duc City (commercial name: Thủ Thiêm Green House) by Thủ Thiêm Group Joint Stock Company.
Thủ Thiêm Green House is the first SH project in Ho Chi Minh City to meet the conditions for borrowing the 120,000 billion VND preferential credit package. BIDV Bank – District 7 Branch has appraised and agreed to provide credit with a maximum limit of 585 billion VND for this project.
According to information from BIDV, the bank branch stated that it would disburse the loan when the project investor Thủ Thiêm Green House completes and provides all relevant documents in accordance with regulations. Currently, this investor is borrowing capital from TPBank and being supported under the 2% interest support program to implement the project.
Banks support but not easy to borrow
According to Mr. Huynh Thanh Khiết, Deputy Director of the Department of Construction of Ho Chi Minh City, the 120,000 billion VND preferential credit package is a commitment of 4 banks (including Agribank, BIDV, Vietcombank, and Vietinbank) with the Government for the finance of investors and homebuyers of SH projects and workers’ housing.
The interest rate is set lower by about 1.5% to 2% compared to the average long-term lending interest rate of the above-mentioned state commercial banks.
Mr. Khiết, Deputy Director of the Department of Construction of Ho Chi Minh City, said that banks strongly supported this program. However, when accessing appraisal documents to approve loans to investors, banks have their own regulations on borrowing conditions to ensure repayment of loans according to regulations.
Specifically, SH projects for workers and workers’ housing must have a land use right certificate, but there is a regulation that “organizations that are granted land by the state free of charge are not allowed to mortgage land use rights certificates.” Therefore, the investor cannot use the land area for SH project implementation as collateral for loans and must use other assets instead.
 Mr. Huynh Thanh Khiết, Deputy Director of the Department of Construction of Ho Chi Minh City. (Photo: Anh Phuong)
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According to Mr. Khiết, most of the SH project investors, after being granted land allocation decisions or land use purpose conversion decisions, have not completed the procedures for issuing land use rights certificates. Therefore, they will not fully meet the loan application requirements as regulated by the bank.
In addition, the 120,000 billion VND preferential credit package is currently being applied at 4 state commercial banks. However, during the project implementation process, investors can agree with other banks to provide credit limit guarantees for contractors, homebuyers, and the formation of guaranteed houses in the future… resulting in differences in lending regulations among banks.
Regarding renovated and reconstructed apartment projects, according to Mr. Khiết, in addition to the conditions for lending according to the instructions of the Ministry of Construction, banks also require investors to have land allocation decisions and new construction permits to consider lending.
Mr. Khiết, Deputy Director of the Department of Construction of Ho Chi Minh City, said that in October 2023, the department proposed the city’s People’s Committee to recommend the Ministry of Construction to lead and coordinate with the Ministry of Natural Resources and Environment, and the State Bank to resolve difficulties in implementing the 120,000 billion VND preferential credit package.
Four social housing projects in Ho Chi Minh City eligible for the 120,000 billion VND preferential credit package
1. Rental social housing project in Nguyen Son Residential Area, Binh Chanh District, invested by Nguyen Son Real Estate Joint Stock Company. The project is under construction up to the 8th floor and the investor needs to borrow 150 billion VND.
2. Ly Thuong Kiet social housing project in District 10 by Duc Manh Joint Stock Company, with a loan demand of 570 billion VND. In terms of construction progress, 2 blocks in Zone B have completed the roof and 2 blocks in Zone A are under construction up to the 9th floor.
3. Long Truong Residential Area project, Thu Duc City, invested by Dien Phuc Thanh Construction and Trading Company Limited. This project is currently constructing the foundation, and the investor needs to borrow 190 billion VND.
Anh Phuong
