Preferential loans for social housing extended up to 25 years

ABO/NDO – The loan term for the purchase of social housing has been extended to 25 years at the highest, according to a recently-issued Government decree regarding the issue.
Accordingly, under Decree No. 49/2021/NÐ-CP, amending and supplementing a number of articles under Decree No. 100/2015/NÐ-CP on development and management of social housing, the loan term for the purchase and lease purchase of social housing agreed by banks and customers is consistent with the repayment capacity of customers and must not exceed 25 years from the first loan disbursement date.
Previously, under Decree No. 100, the minimum loan term was set at 15 years from the disbursement date of the first loan.
According to the latest decree, the maximum loan amount for purchase and lease purchase of social housing is equal to 80% of the value of the purchase, lease purchase contract.

A social housing complex in the Dang Xa urban area, Gia Lam District, Hanoi. (Photo: NDO/DUC ANH).

In case of building, renovating or repairing a house, the maximum loan amount is 70% of the estimate value or loan plan, but not exceeding VND500 million and 70% of the value of the security guarantee.
Regarding interest rates, the lending interest rate at the Vietnam Bank for Social Policies is decided by the Prime Minister for each period at the request of the lender’s board of directors.
Loan interest rates at designated credit institutions are determined and announced by the State Bank of Vietnam on the basis of ensuring the principle of not exceeding 50% of the average lending interest rate of commercial banks in the same period.
The provincial People's Committees are responsible for allocating enough land fund for social housing development, based on the local demand for social housing and the approved housing development programmes and plans.
They are also tasked with directing functional agencies to determine in detail the location and scale of each social housing project so that they are synchronous with technical and social infrastructure systems for social housing development.
In commercial housing or urban area projects with land use from 2 ha in special urban centres, and those in grade I or at least 5 ha in urban centres in grades II and III, they must use 20% of the total residential land area in detailed planning projects approved by competent agencies for the construction of social housing properties.

(Source: NDO)