Requirements for mortgage on projects on housing construction and mortgage on off-the-plan housing in Vietnam

Requirements for mortgage on projects on housing construction and mortgage on off-the-plan housing in Vietnam (Internet image)

Regarding this issue, LawNet would like to answer as follows:

1. Requirements for mortgage on projects on housing construction and mortgage on off-the-plan housing in Vietnam

Requirements for mortgage on projects on housing construction and mortgage on off-the-plan housing according to Article 148 of the Law on Housing 2014 are as follows:

- Requirements for mortgage on projects on housing construction and mortgage on off-the-plan housing:

+ In case the investor mortgages a part or all of the project on housing construction, a approved dossier on project, technical design and the Certificate or Decision on land allocation or land lease issued by the competent agency are required;

+ In case the investor mortgages an off-the-plan house in the project, he is required to satisfy both requirement prescribed in Point a of this Clause and other requirement that the foundation of that house must be finished as prescribed in law on construction and it is not subject to the part or all of the project which is mortgaged by the investor as prescribed in Point a of Clause 1 Article 148 of the Law on Housing 2014;

+ If any organization or individual mortgages their houses prescribed in Clause 2 Article 147 of the Law on Housing 2014, the Certificate of rights to use land prescribed in law on land, or License for construction (if applicable) is required.

In case the mortgagor who mortgages his/her off-the-plan house buys a house in the project on housing construction from the investor, he/she is required to conclude an agreement on housing sale with the investor, or obtain a grant deed of the house if he/she is the transferor, documentary evidence for payment of the house on contractual schedule and he/she is not subject to any complaints, lawsuit, or dispute about agreement on housing sale or transfer of the agreement.

- The mortgage on projects on housing construction and the mortgage on off-the-plan houses must comply with regulations of the Law on Housing 2014; if not, that mortgage shall be considered illegal.

2. Who has the right of mortgage on projects on housing construction and mortgage on off-the-plan housing in Vietnam? 

According to Article 147 of the Law on Housing 2014, the right of mortgage on projects on housing construction and mortgage on off-the-plan housing in Vietnam is as follows:

- The investor in the project on housing construction is entitled to mortgage the project or houses in the project at a credit institution operating in Vietnam to apply for loans to invest in the project or build houses in the project;

In case the investor has mortgaged the house, but he/she wishes to mobilize capital to divide the house as prescribed in law on housing and wishes to sell or lease and purchase that house, the mortgage on the house (if any) has been paid off before the agreement on housing capital mobilization, sale, or lease purchase is concluded with clients, unless otherwise agreed by the contributor, the buyer/lessee and the lender.

Before concluding an agreement on housing capital mobilization, sale, or lease purchase with clients as prescribed in this Clause, it is essential to refer to the Certificate of conformity to sell issued by the housing authority of province in order to determine the mortgage on the house is whether has been paid off.

- Any organization or individual who builds an off-the-plan house on their lawful piece of land; any organization or individual who buys an off-the-plan house in a project on housing construction from an investor is entitled to mortgage that house at a credit institution operating in Vietnam in order to apply for a loan to build or buy that house.

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