“Central Bank Aims to Slash Interest Rates to Encourage Social Housing Loans.”

At the Regular Government Press Conference for July, Deputy Minister of Construction Bui Xuan Dung provided information on the VND120,000 billion credit support package. He shared that, so far, only 34 out of 63 provinces have announced 78 eligible projects for preferential loans on their electronic information portals. The banks have disbursed a total of VND1,344 billion, including VND1,295 billion to investors for 12 projects and VND49 billion to home buyers for 5 projects.

According to Resolution No. 33 of the Government, the program offers approximately VND120,000 billion in loans to investors and homebuyers of social housing and worker housing projects at interest rates 1.5-2% lower than the average medium and long-term lending rates of state-owned commercial banks in the market during the respective periods.

The State Bank of Vietnam (SBV) is consulting with relevant ministries, branches, and sectors on the draft submission and resolution to adjust the content of the VND120,000 billion program outlined in Resolution No. 33/NQ-CP. The proposed adjustment aims to reduce lending rates for homebuyers to 3-5% (the support rate for investors remains at 1.5-2%).

The Ministry of Construction has agreed with the SBV’s proposal, creating favorable conditions for people to access preferential capital. This move is also in line with the Government’s Notice 123 dated March 27, 2024, the conclusion of the Prime Minister at the Conference on Removing Difficulties and Promoting Social Housing; Resolution 44 of the Government on April 5, 2024; the Regular Government Meeting in March 2024; the Government’s teleconference with localities; and the Prime Minister’s Official Dispatch 32 dated April 5, 2024, on solutions to direct and promote credit in 2024.

Moving forward, the Ministry of Construction suggested that the SBV direct and encourage more commercial banks to participate in lending under the VND120,000 billion support package and relax credit conditions. They also recommended that the SBV facilitate procedures for banks to consider extending the lending term and provide interest rate support for this package.

The lending term is proposed to be extended to 10-15 years, with preferential interest rates 3-5% lower than those of regular commercial banks. This extended term will benefit low-income earners and industrial park workers.

Regarding the tasks and solutions for the near future, the Ministry of Construction requested that the SBV direct and inspect the investment and construction of social housing, ensuring quality and the completion of technical and social infrastructure, as well as essential services for commercial housing projects. They also encouraged the development of green social housing models that promote energy conservation and sustainable development.

The Ministry of Construction emphasized the need for localities to have specific mechanisms and solutions to streamline administrative procedures for project establishment and approval, land allocation and leasing, site clearance, and construction support for enterprises. This will help create market supply and take advantage of the preferential policies for social housing development.

Furthermore, localities should focus on urging investors who have started construction to complete and put their projects into use promptly. At the same time, they should continue to select investors for projects that have not yet started construction. The two cities of Hanoi and Ho Chi Minh City, in particular, were urged to enhance their leadership and direction in attracting and accelerating the development of social housing to meet the goals set by the Scheme.