Concessional loan for constructing and renovating social housing for lease in Vietnam

Concessional loan for constructing and renovating social housing for lease in Vietnam (Image from the Internet)

Conditions for concessional loans in Vietnam

According to Article 26 of Decree 100/2024/ND-CP, individuals who self-build or renovate, repair housing to lease to those eligible for social housing support policies can obtain concessional loans when meeting the following conditions:

- Ability to repay the loan as committed to the lending credit institution;

- Possession of a Certificate of Land Use Rights, Ownership of Attached Assets for the housing project to be built, renovated, or repaired;

- A capital use plan, a construction permit if required by construction law. If a temporary construction permit is issued according to the law, loans will be considered in accordance with the permitted duration of the structure;

- Use of homestead land value and attached assets or other assets as collateral according to the law for securing the loan.

Individuals who self-build or renovate, repair housing for those eligible for social housing support policies to lease can get concessional loans and must prepare an investment project. They are not allowed to trade social housing products through sales. During implementation, they must report periodically every three months to the provincial housing management authority.

Amount, term, and interest rate of concessional loans in Vietnam

* Concessional loan Amount: The maximum loan amount is 70% of the total project investment or capital use plan and does not exceed 70% of the collateral value.

* Loan Term: The maximum loan term is no more than 20 years from the date of the first disbursement.

* Concessional loan Interest Rate:

+ The concessional loan interest rate at the Social Policy Bank is equal to the interest rate for loans to purchase, lease social housing at the Social Policy Bank as regulated periodically.

+ Overdue loan interest rate is 130% of the concessional loan interest rate;

+ The concessional loan interest rate of credit institutions is determined by agreement between the credit institution and the customer.

Eligible subjects for social housing support policies in Vietnam

There are 12 subjects eligible for social housing support policies in Vietnam according to Article 76 of the Housing Law 2023 including:

- People with meritorious service to the revolution, relatives of martyrs eligible for housing improvement support according to the Ordinance on Prefeleaseial Treatment for People with Meritorious Services to the Revolution.

- Poor and near-poor rural households.

- Poor and near-poor rural households in areas frequently affected by natural disasters and climate change.

- Poor and near-poor urban households.

- Low-income people in urban areas.

- Workers in enterprises, cooperatives, unions of cooperatives inside and outside industrial zones.

- Officers, professional soldiers, non-commissioned officers of the People's Armed Forces, public security workers, defense officers, workers, and public employees in defense serving active duty; those working in cipher organizations, and others in cipher organizations receiving state budget salaries.

- Civil servants and public employees as regulated by civil servants and public employees' law.

- Individuals who have returned official residences according to Clause 4, Article 125 of this law, except for cases where official residences are withdrawn due to violations of this law.

- Households and individuals whose land is repossessed and housing demolished by law without State compensation in the form of housing or homestead land.

- Students of universities, academies, colleges, vocational schools, and special schools regulated by law; students of public boarding ethnic schools.

- Enterprises, cooperatives, and union of cooperatives within industrial zones.

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