Support low-income people to access capital to buy social housing

As implementing the Government's direction on promoting the development of a healthy real estate market, in 2023, Binh Duong province reviewed and announced information on 4 social housing investment projects in the area to access loans from the Government's VND-120,000 billion package according to Resolution No. 33/NQ-CP dated March 11, 2023, to help investors reduce social housing prices, and people can access and buy social housing conveniently and affordably.

Dinh Hoa social housing area

According to experts, the current incentive mechanisms and policies for the construction of social housing have not really attracted or encouraged businesses to participate in construction investment due to low profits, long investment time, and slow capital recovery. On the other hand, building the program and plan proved challenging because complex difficulties were not fully anticipated, and goals and targets were set too high, making it difficult to complete the plan.

Recently, the government implemented a large social housing loan package, but the disbursement rate remains low. The report of the Ministry of Construction sent to the National Assembly shows that only 34/63 provincial and municipal People's Committees have issued documents announcing 83 projects eligible for preferential loans on the electronic information portal. Out of these projects, 15 have signed credit contracts for loans under the VND120,000-billion package, resulting in a total credit commitment of 4,200 billion VND and an outstanding debt of 1,624 billion VND. The remaining 68 projects have not signed credit contracts for loans under the same package. Among these, 57 projects have investors who do not require additional funding, 6 projects are currently being appraised by commercial banks, and 5 projects do not meet the necessary loan conditions.

According to the Ministry of Construction, the disbursement of the VND120,000-billion credit package is still slow due to obstacles such as the limited number of participating banks, the limited initial supply of social housing is still limited, and the limited interest rate and interest period not attracting borrowers. To solve current difficulties, the Ministry of Construction proposes solutions, which are: continue to review, remove difficulties and obstacles and urge localities to promptly announce the list of social housing projects eligible for loans to effectively implement the social housing support loan program; continue to consider reducing interest rates and extending preferential loan terms to encourage social housing development; study to allow opening credit targets/limits for commercial banks in the following directions: The social housing loan portion is not included in the bank's credit target/limit and is evaluated and summarized annually. The Ministry of Construction proposed that the State Bank encourage commercial banks to participate in the lending program with a support capital of VND120,000 billion.

Recently, the Government assigned the Ministry of Construction to study and develop a VND30,000-billion credit package for social housing. The Ministry of Construction said that it is working with the Ministry of Finance and the State Bank to compile a report proposing that the Government consider soon implementing a suitable and effective VND30,000-billion credit package to help low-income people access preferential capital to buy social housing.

 Reported by Phuong Le - Translated by Ngoc Huynh