VND30,000 billion credit package: The joy from the Prime Minister’s decision

Finally, the anxiety of real estate buyers and investors over the VND30,000 billion credit package has been removed at the last minute. Prime Minister Nguyen Tan Dung has agreed to extend the disbursement of VND30,000 billion credit package until its end, instead of  before Jun 1^st 2016 at the regular plenum of Mar 2016…

The disbursement extension of the VND30,000 billion package brings unexpected joys to home buyers and project investors. Photo: Customers learned about credit terms of Binh Duong First Home Premium’s apartments

Being anxious

Bui Van Nghia living in Phu Hoa ward, TDM City was worried about the information that banks would stop applying the VND30,000 billion credit package. Earlier, in mid-2015, he and two friends liked a low-price housing project in Ben Cat town, and then a large real estate company and a bank consulted them about taking a loan from the VND30,000 billion package, thus they decided to deposit  over VND100 million and are waiting for relevant procedures. However, now his chance is gone. Nghia said, he has been waiting since the Lunar New Year, but so far these procedures have not done yet. If the above information is true, he will lose the chance to obtain loan from the VND30,000 billion package. Meanwhile, he cannot afford the high interest rates of commercial loans, and it is not easy to cancel the contract or withdraw his deposit. Many people are in a similar situation.

However, such cases are considered as… lucky, because successful borrowers of this package are also sitting on the fire, because of the information of adjusted interest rates after Jun 1. Tran Van Hanh living in Lai Thieu ward, Thuan An town said, since more than half a month, he had mobilized many sources to fulfill the VND30,000 billion package’s payment before Jun 1 to enjoy a preferential interest rate. In early 2015, he bought an apartment costs nearly VND1 billion in Thuan An town. Because he cannot fulfill a one-time payment, the investor consulted him about the VND30,000 billion credit package. Meeting all credit terms, his contract with bank was signed in Jun 2015 for a loan of VND700 million paid by installments in 15 years. However, so far the loan has been disbursed more than VND300 million. It is noteworthy that they were not informed by bank officer that interest rate would be adjusted after Jun 1.

Troubleshooting at the last minute

According to Circular 11/2013/TT-NHNN of the State Bank of Vietnam (SBV) on credit terms of the VND30,000 billion credit package and credit contracts between commercial banks and customers, there was a general provision that disbursements after Jun 1^st 2016 could not enjoy the preferential interest rate of 5% / year and must apply commercial interest rates. SBV confirmed, this had been clearly stipulated, since the package’s implementation. However, many customers were shocked with the termination of the VND30,000 billion credit package, because they were not informed about this information by banks as taking loans.

The VND30,000 billion package for home loans started in Jun 2013. By this time, banks signed lending contracts for totally VND30,122 billion with 46,246 customers, which exceeded the package limit. That was why SBV issued an express announcement asking banks to stop signing new credit contracts under this package. Earlier, when the package was accelerated to the finish, some banks announced the application of normal commercial interest rates to loan disbursements after Jun 1. This was also not a good news to real estate investors in Binh Duong province in particular and the country in general.

While the real estate market was waiting, the Prime Minister has agreed to extend the package disbursement until the end, instead of  before Jun 1^st 2016. Namely, in the regular plenum’s resolution of Mar 2016, Prime Minister Nguyen Tan Dung asked  SBV to continue implementing the VND30,000 billion package for home loans. The applied preferential interest rate is 5% / year until fully disbursement. Thus, home buyers signing credit contracts before Mar 31^st 2016 will receive disbursements and enjoy the preferential interest rate of 5% / year throughout the credit period.

According to Hoang Anh Tuan, General Director of Tac Dat Tac Vang Real Estate Company (TDM City), the Pime Minister Nguyen Tan Dung’s decision not only immediately removed difficulties of the real estate market but also expressed the Government’s consistency in the implementation of this particular loan package. Mr. Tuan said, although the deployment of the VND30,000 billion package was still limited, this was surely a good news to low-income people, especially officials, workers living and working in Binh Duong, because the housing demands of Binh Duong provincial real estate market was huge.

Reported by Khanh Vinh – Translated by Ngoc Huynh