New decree to boost social housing development

With a view to removing bottlenecks for the development of social housing projects to meet market demand, the Government issued in April Decree 49/2021/ND-CP, revising a number of articles of Decree 100 dated October 20, 2015, on social housing development and management.

Accordingly, the new decree includes new regulations on percentage of land in commercial housing projects, urban areas and industrial zones which must be used for social housing as well as preferential loan interest rates for social housing developers and buyers.

Commercial housing and urban area projects with a total area of two hectares or more in urban areas classified as special or type one or of five hectares or more in urban areas of types two and three must designate 20 percent of their total land areas with adequate technical infrastructure for social housing development.

As per the decree, the planning of industrial zones must designate appropriate land areas for social housing development with adequate technical and social infrastructure.

Social housing apartments must be sized from 25 square meters to 70 square meters. The number of apartments with floor areas of over 70 square meters must be less than 10 percent of total floor areas in social housing projects.

Regarding loans, the maximum loan amount in case of purchase or lease-purchase of a social house will be 80 percent of the house purchase or lease-purchase contract value.

In case of house building, renovation or repair, the maximum loan amount will be 70 percent of the estimated value or loan plan, which must not exceed VND 500 million or 70 percent of value of assets used as loan security.

In addition, the loan interest rate for social housing buyers must not exceed 50 percent of the average lending rate in the same period.

Under the new decree, the maximum lending duration was extended to 25 years instead of 15 years as specified in the previous one.

(Source:VLLF)