Can an individual mortgage a house before the construction is completed in Vietnam?

Can an individual mortgage a house before the construction is completed in Vietnam?

Pursuant to Clause 2, Article 147 of the Law on Housing 2014 stipulates mortgage on projects on housing construction and mortgage on off-the-plan housing as follows:

1. The investor in the project on housing construction is entitled to mortgage the project or houses in the project at a credit institution operating in Vietnam to apply for loans to invest in the project or build houses in the project; in case the investor has mortgaged the house, but he/she wishes to mobilize capital to divide the house as prescribed in law on housing and wishes to sell or lease and purchase that house, the mortgage on the house (if any) has been paid off before the agreement on housing capital mobilization, sale, or lease purchase is concluded with clients, unless otherwise agreed by the contributor, the buyer/lessee and the lender.

Before concluding an agreement on housing capital mobilization, sale, or lease purchase with clients as prescribed in this Clause, it is essential to refer to the Certificate of conformity to sell issued by the housing authority of province in order to determine the mortgage on the house is whether has been paid off.

2. Any organization or individual who builds an off-the-plan house on their lawful piece of land; any organization or individual who buys an off-the-plan house in a project on housing construction from an investor is entitled to mortgage that house at a credit institution operating in Vietnam in order to apply for a loan to build or buy that house.

Thus, an individual may only mortgage a off-the-plan house to borrow money for housing construction or to buy the house itself. Housing cannot be mortgaged for investment or other purposes in Vietnam.

Best Regards!