The Ministry of Construction has recently submitted a report to the National Assembly and its delegates, detailing the progress made in addressing the National Assembly’s resolutions on interpellation and thematic supervision.
Regarding the disbursement of the VND 120,000 billion credit package, which commenced in April 2023, the Ministry of Construction reported that 38 out of 63 provinces and cities have announced 97 eligible social housing projects.
The disbursed amount from this credit package is estimated at approximately VND 3,400 billion, with over VND 550 billion disbursed in the first four months of this year. Of this, about VND 2,940 billion was loaned to 21 social housing project developers, and nearly VND 460 billion was loaned to homebuyers in 19 projects.
Slow disbursement of the social housing credit package due to limited supply.
Concerning interest rates, according to Resolution 33 of 2023, the interest rate for social housing development support is 1.5-2% lower than the average mid and long-term VND interest rate of the four state-owned commercial banks during the respective period.
Since July 2023, the State Bank has made five interest rate reductions for the VND 120,000 billion credit package. Specifically, from July 2023 to January 2025, the interest rate for the preferential credit package for social housing developers was reduced from 8.7%/year to the current rate of 6.6%/year.
Meanwhile, the preferential interest rate for purchasing social housing was adjusted downward from 8.2%/year to 6.1%.
Thus, since the implementation of the VND 120,000 billion credit package for social housing development, the interest rate has decreased by over 2%.
The Ministry of Construction acknowledged that the disbursement of the VND 120,000 billion credit package (which has now been increased to VND 145,000 billion by the banks) has been slow over the years.
This is attributed to limited social housing supply and some developers not meeting the loan requirements, such as insufficient collateral or not meeting debt balance conditions.
To address these challenges, the Ministry of Construction proposed several solutions, including continuing to review and remove obstacles and urging localities to announce the list of eligible projects for lending.
The Ministry of Construction suggested studying the possibility of allowing commercial banks to open credit indicators and limits, with loans for purchasing social housing not included in the banks’ credit growth limits.
Additionally, the Ministry proposed the early establishment of the Social Housing Fund, as directed by the Prime Minister, to create a long-term capital source for social housing development.
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