HCMC – The State Bank of Vietnam (SBV) plans to revise its VND120 trillion home loan package to make it more attractive to buyers of social homes.
The revision comes after the soft loan package saw few takers despite being launched over a year ago, with merely VND1.34 trillion disbursed so far.
SBV Deputy Governor Dao Minh Tu said that the revisions would include a further decrease in lending rates during a press conference about the banking sector’s performance in the first half of 2024, held today, July 23.
Borrowers can expect a three-percentage-point reduction in interest rates at the four state-run banks, lower than the previously offered 1.5-2 percentage point drop. The interest rate will be reviewed every three months, instead of the current six months.
Additionally, after the initial five-year period, banks will continue offering preferential rates, at least 1-2 percentage points below commercial rates, instead of switching to floating rates as in the current package.
The loan package targets both legal entities and individuals investing in or purchasing homes in social housing projects and old apartment renovation projects listed by the Ministry of Construction.
Borrowers must meet eligibility criteria under current laws and Ministry of Construction guidelines and comply with legal requirements for loan approval. Each home buyer can participate in the loan program once to purchase a single apartment unit, and each project developer can only access the loan package once.
The SBV’s move responds to the slow disbursement of the loan package since its launch in April 2023. Initially aimed at supporting the development of one million social homes by 2030, the package has seen only VND1.34 trillion out of the VND120 trillion disbursed so far.
In addition to the state-run commercial banks, TPBank and VPBank have joined the program, with each committing VND5 trillion. The slow rollout is attributed to the limited number of provinces listing social home projects, with only 34 out of 63 doing so.
Many developers of the 78 listed projects have not sought loans. Legal obstacles, such as land clearance and project commencement delays, have also impeded progress.
