Vietnam: All regulations on concessional loans for construction of social housing

According to Article 15 of Decree No. 100/2015/ND-CP of Vietnam’s Government, concessional loans for construction of social housing are specified as follows:

Firstly, eligible borrowers:

- Enterprises, cooperatives being investors in social housing projects that are not funded by the capital sources or methods specified in Clause 1 Article 53 of the Law on Housing;

- Enterprises, cooperative engaged in industrial production and/or services that invest in construction of houses for their own workers without collecting rents or collecting rents that do not exceed the maximum rent for social housing imposed by the People’s Committee of the province;

- Households and individuals that invest in construction of social houses for lease, for lease purchase, and/or for sale.

Secondly, requirements for entities eligible for concessional loans:

- be established and operating in accordance with law; has a list of social housing projects conformable with the social housing investment program approved by a competent authority;

- have an investment project that is granted a decision on investment policies in accordance with regulations of law on investment and housing;

- have obtained a decision on land provision or land use right in accordance with regulations of law on land, and land clearance and compensation has been complete;

- have obtained the license for construction in accordance with regulations of law on construction;

- have a minimum capital required by the loaning program of the lending credit institution;

- obtain a loan guarantee or take a mortgage as prescribed by law.

Note: Households and individuals that invest in construction of social houses for lease, for lease purchase, and/or for sale must have an investment plan approved by a competent authority and satisfy the requirements specified in Point c through e Clause 2 of this Article.

Thirdly, maximum loans:

- Regarding construction of social houses for lease: the maximum loan is 80% of the total investment in the project or loaning program, and must not exceed 80% of the collateral value;

- Regarding construction of social houses for sale or lease purchase: the maximum loan is 70% of the total investment in the project or loaning program, and must not exceed 70% of the collateral value.

Fourthly, loan term:

- Regarding construction of social houses for lease, the minimum loan term is 15 years and the maximum loan term is 20 years from the date of the first disbursement;

- Regarding construction of social houses for sale or lease purchase, the minimum loan term is 10 years and the maximum loan term is 15 years from the date of the first disbursement;

- Regarding projects of social houses for sale, the minimum loan term is 05 years and the maximum loan term is 10 years from the date of the first disbursement;

- Any borrower that wishes to have a shorter loan term than those specified in Point a, b, and c of this Clause may reach an agreement with the lending bank.

Fifthly, the principal and interest shall be paid in accordance with regulations of the lending credit institution.

Sixthly, loan interest:

- The concessional rates of Vietnam Bank for Social Policies are decided by the Prime Minister at the request of the Board of Directors at that time;

- The concessional rates of credit institutions are decided and announced by the State bank of Vietnam; such rates shall not exceed 50% of the average interest rate of banks at the same time.

Seventhly, disbursement: Capital is disbursed according to the progress of the project and at the investor’s request. The amount disbursed depends on the completion of the works according to technical checkpoints.

View more details at: Decree No. 100/2015/ND-CP of Vietnam’s Government takes effect from December 10, 2015.

Thu Ba

>> CLICK HERE TO READ THIS ARTICLE IN VIETNAMESE