Adjustment of interest rate for the preferential loan program for social housing in Vietnam from August 1, 2024

Adjustment of interest rate for the preferential loan program for social housing in Vietnam from August 1, 2024

While awaiting the issuance of documentation templates by the Ministers of the Ministries: Ministry of Construction, Ministry of Public Security, and Ministry of Defense to validate the subjects and conditions to benefit from social housing support policies as a basis for issuing implementation guidelines for Decree 100/2024/ND-CP, the General Director of the Vietnam Bank for Social Policies requires Vietnam Bank for Social Policies branches in provinces and cities to execute the following:

Clause 14, Article 78 of Decree 100/2024/ND-CP stipulates: "For loan agreements already signed with the Vietnam Bank for Social Policies to purchase, rent-purchase social housing, or to construct new or renovate, repair housing under Article 16 of Decree 100/2015/ND-CP dated October 20, 2015, of the Government of Vietnam (amended and supplemented by Decree 49/2021/ND-CP dated April 1, 2021, of the Government of Vietnam) before this Decree comes into effect, shall apply the interest rate stipulated in Clause 4, Article 48 of this Decree to the actual principal balance and overdue principal balance (if any)."

Clause 4, Article 48 of Decree 100/2024/ND-CP stipulates: “The loan interest rate shall be equal to the loan interest rate for poor households as stipulated by the Prime Minister of the Government of Vietnam from time to time. The overdue debt interest rate is 130% of the loan interest rate.”

Therefore, for loans signed prior to August 1, 2024, the Vietnam Bank for Social Policies lending branch and the borrower shall negotiate and agree on the following terms in the Credit Agreement Appendix:

"6. Other contents:

Amend Clause 3, Article 1 of Credit Agreement No... dated …/…/….. as follows:

"3. Loan interest rate:

a) Loan interest rate: The loan interest rate shall be equal to the loan interest rate for poor households as stipulated by the Prime Minister of the Government of Vietnam from time to time. Currently, the loan interest rate is 6.6% per annum.

b) The overdue debt interest rate is 130% of the loan interest rate.

c) In case of changes in loan interest rates or overdue debt interest rates, the Lender is responsible for notifying the Borrower no later than the first day of the following interest calculation period.” ”

Subsequently, note the agreed timing in the Credit Agreement Appendix and sign, clearly stating the names of the Borrower and the Lender.

For detailed content, refer to Official Dispatch 4524/NHCS-TDSV issued on August 1, 2024.

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