Housing loans remain hard to get

Distribution of the Government's VND30 trillion (US$1.4 billion) package for low-cost housing has only seen 1.56 per cent of the total VND470.8 billion distributed, six months after the programme began

State Bank of Viet Nam (SBV) figures indicated that by the end of November, five designated banks, including Vietinbank, Vietcombank, BIDV, Agribank and MHB, disbursed the housing loan to more than 1,200 applicants. Further, Vietinbank is committed to providing loans to 314 customers. Vietcombank is to provide loans to 360 customers, with a total of VND134.5 billion being disbursed.

The central bank said three banks, including BIDV, Vietcombank and Agribank, signed credit contracts with 10 businesses, with total capital of VND1.11 trillion. However, the banks disbursed this sum of money to only five companies, with total loans only reaching VND176 billion. The Ministry of Construction had earlier say that the loans would be disbursed within three years.

 

 

 

Under the loan package, buyers of low-income housing, Government workers, and military personnel, can borrow money at just six per cent interest for the first three years when buying a house or apartment with an area less than 70 sq.m, and costing no more than VND15 million per sq.m. The maximum loan will be for 10 years for personal use, and 5 years for businesses.

However, applicants should not own housing or have a house with less than 8 sq.m per household per person to be eligible to receive this loan. Talking about the slow disbursement, the banks were quoted by Dantri online newspaper as saying the main reason they are needed was the lack of social housing supplies.

In addition, they said the regulations stipulated that social housing projects would not be transferred within 10 years of the signing date. The apartments would only be transferred to the Government, investors or other eligible people.

Banks, therefore, required investors to sign a three-party contract among banks, businesses and people, in which investors were asked to purchase the apartment if a buyer could not make payments on his loan.

Nguyen Viet Manh, head of SBV's Credit Department, said the contract would make loans safe if buyers did not have assets. Viet Nam has 167 social housing projects, of which 34 apartment blocks with 19,000 units are now in use. The remaining units are under construction.

Experts said the slow disbursement was caused by regulations asking home buyers to prove their ability to pay their debts. However, Dang Hung Vo, former deputy minister of Natural Resources and Environment, told the newspaper that this requirement would make home buyers hesitate to borrow loans.

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