Upper limit imposed on loans for social housing construction in Vietnam

Bao Ngoc

14:18, 09/12/2021

On November 30th, 2021, the State Bank of Vietnam promulgated Circular 20/2021/TT-NHNN amending and supplementing a number of articles of Circular 25/2015/TT-NHNN guiding grant of preferential loans to implement social housing policy.

According to this Circular, amendments to Clause 4, Article 6 of Circular 25/2015/TT-NHNN of Vietnam as follows:

The appointed credit institution based on the loan demand, the repayment ability of the customer, and the ability of its own capital source to decide the lending level for customers taking preferential loans for new construction or renovation and repair their own housing in Vietnam:

The maximum loan amount is 70% of the estimated value or the loan plan, not more than 500 million VND and not more than 70% of the collateral

(The VND 500-million limit was not provided for by the previous Circular)

In addition, Circular 20/2021 of Vietnam also provides for the maximum loan term, specifically:

For customers who borrow capital for new construction or renovation or repair of residential houses in Vietnam: The loan term shall be agreed upon by the bank and the customer will consider their ability to repay and compulsory not exceed 25 years from the date of first loan disbursement.

(Currently, the minimum loan term is 15 years from the date of first loan disbursement)

Circular 20/2021/TT-NHNN of the State Bank takes effect from January 20th, 2022 .

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