Reason for the 120 trillion credit package's delay

Currently, there are about 87 social housing projects that have been granted construction permits

Minister, Chairman of the Government Office Tran Van Son explained that while this credit package has not been disbursed due to the fact that there are still many obstacles in land allocation, lack of local social housing development planning, complex procedures for land use exemption for social housing projects, prolonged timeframes, and conditions for purchasing social housing. As a result, many firms are looking forward to the successful implementation of the modified Housing Law, which will include more simplified procedures and conditions.

Furthermore, because many papers were only released in the last month, several municipalities are still compiling project lists and lists of qualified borrowers.

Many recommendations were made at a recent progress meeting on the implementation of the 120 trillion VND preferential credit package to supplement eligible investors for social housing projects, rental housing for workers, extended support for preferential interest rates for homebuyers and investors, and simplification of procedures and costs for land use exemption for social housing projects.

According to Deputy Minister of building Nguyen Van Sinh, around 87 social housing projects have been awarded building licenses and are ready to receive preferential loans from the 120 trillion VND credit package in the near future. The finance is provided by four state-owned commercial banks, namely Agribank, BIDV, Vietcombank, and VietinBank, for qualified investors and homeowners through December 31, 2030.

Based on information from the State Bank of Vietnam (SBV), the interest rate support for investors is 8.7% per year and 8.2% per year for homebuyers, with a deadline until June 30. Accordingly, the SBV announced that the interest rate for loans in the six-month period will be supported according to the above principles starting from July 1, 2023.

Deputy Prime Minister Tran Hong Ha emphasized that this credit source was not issued with the purpose of "rescuing" the real estate market, but rather to invest in the construction of at least 1 million social housing apartments for low-income individuals and industrial zone workers between 2021 and 2030.

He also asked frequent monthly updates on the progress of the 120 trillion VND credit package's execution. In addition, the SBV and the Ministry of Construction will investigate and recommend appropriate interest rate assistance options and durations for qualified investors and borrowers under the 120 trillion VND credit package.

To ensure the utilization of the credit package in daily life, representatives of the SBV requested ministries and sectors to review and amend relevant legal documents to resolve legal, procedural, and sequencing obstacles in investment and construction of social housing and workers' housing, increase the housing supply for the market, and meet the real needs of low-income individuals.

Businesses also said unequivocally that social housing will satisfy the "housing thirst" for inexpensive houses while also giving an exit plan for the currently sluggish real estate market, where developers are primarily focused on high-priced housing. However, in order to execute this solution more swiftly, support measures, particularly the 120 trillion VND loan package, must speed up the distribution process even faster.

Mr. Ho Phi Dung, Chairman of the Lang Son Provincial Enterprise Association, stated that, in addition to waiting, more specific solutions should be sought. "There are many restrictive provisions and issues that many businesses will be unable to access, borrow capital from, or proceed with." It has to do with credit approval. Financial reports, profitability, charter capital, past project records, and a variety of other requirements must be provided by businesses."