What is the maximum loan amount for building social housing in Vietnam for lease purchase?

What is the maximum loan amount for building social housing in Vietnam for lease purchase?

Pursuant to Article 6 of the Circular 25/2015/TT-NHNN stipulating level of loans in Vietnam as follows:

Appointed credit institutions shall make decision on level of loans to borrowers in reliance on borrowers’ demands, creditworthiness and their own capital sources, specifically:

1. Construction of social houses for lease: Maximum level shall be 80% of total project investment and not exceed 80% of loan collateral.

2. Construction of social houses for lease purchase, for sale: Maximum level shall be 70% of total project investment and not exceed 70% of loan collateral.

3. Purchase, lease or lease purchase of social houses: Maximum level shall be 80% of the contract for purchase, lease, and lease purchase of houses. (removed under Article 2 of the Circular 20/2021/TT-NHNN)

4. If customers take preferential loans for building new houses or repairing existing houses, the maximum loan is 70% of the estimated value or loan plan. The maximum loan shall not exceed 500 million VND; not exceed 70% of the value of the collateral. (amended by Clause 3 Article 1 of the Circular 20/2021/TT-NHNN)

As regulations above, the maximum level of loan that your company could have shall be 70% of total project investment and not exceed 70% of loan collateral.

What is the time limit for loan to build social housing in Vietnam for lease purchase?

Pursuant to Article 7 of the Circular 25/2015/TT-NHNN (amended by Clause 4 Article 1 of the Circular 20/2021/TT-NHNN) stipulating loan terms in Vietnam as follows:

1. For borrowers as prescribed in Clause 1, Article 2 hereof applying for loans to construct houses for lease, loan term shall be at least 15 years and not exceed 20 years since disbursement of the first loan.

2. For borrowers as prescribed in Clause 1, Article 2 hereof applying for loans to construct social houses for lease purchase, loan term shall be at least 10 years and not exceed 15 years since disbursement of the first loan.

3. For borrowers as prescribed in Clause 1, Article 2 hereof applying for loans to construct social houses for sale, loan term shall be at least 05 years and not exceed 10 years since disbursement of the first loan.

4. Customers prescribed in Clause 2 Article 2 of this Circular that take preferential loans for building new houses or repairing existing houses: The loan maturity date agreed by the bank and the customer shall be appropriate with the customer’s ability to repay. The loan maturity date shall not exceed 25 years from the date of the first disbursement.

5. Any borrower who needs to shorten minimum loan terms as prescribed in Clauses 1, 2, 3, 4 of this Article may negotiate with credit institutions.

As regulations above, when your company get a loan for building social houses, the loan term shall be at least 10 years and not exceed 15 years since disbursement of the first loan.

What are procedures for application for loans to build social housing in Vietnam?

Pursuant to Article 11 of the Circular 25/2015/TT-NHNN stipulating procedures for application for loans to build social housing in Vietnam as follows:

Appointed credit institutions shall provide detailed instructions on procedures on application for loans as follows:

1. Borrowers should prepare and deliver applications for loans to appointed credit institutions as prescribed.

2. Based on applications for loans delivered by borrowers, credit institutions shall carry out assessment and make decisions on loans as prescribed hereof.

Credit institutions shall make public announcement of maximum time limit for decisions to be made on loans. In case a loan is declined, credit institutions shall make a written notice to the borrower on request.

3. Loans made by appointed credit institutions to borrowers shall be made in a contract. The contract should specify information on loans made by credit institutions according to applicable regulations.

Above are procedures for application for loans to build social housing in Vietnam.

Best regards!