HCMC – The Ministry of Construction has proposed a VND100-trillion bond issue to raise funds for lending to those eligible for buying social housing under a Government program to build one million homes for low-income earners and factory workers by 2030.
The proposal, currently open for feedback from relevant ministries and agencies, seeks to use the proceeds from the bond sale to make low-interest loans. Interest rates of these loans will be set at levels similar to those for low-income households, as determined periodically by the prime minister.
The Ministry of Construction has suggested that the Ministry of Finance issue Government bonds to provide the necessary funds, which would then be used by the Vietnam Bank for Social Policies (VBSP) to lend to eligible homebuyers, according to the Vietnam News Agency.
The funds will be disbursed over the next six years, with annual allocations of around VND16.5 trillion from 2025 to 2029 and VND17.5 trillion in 2030.
The Government has previously allocated a VND120-trillion credit package for social housing development, but the Ministry of Construction estimates that VND500 trillion is needed to achieve the goal of building one million units by 2030.
Four State-run banks were initially involved in the credit package. In August, four additional commercial banks joined, with each pledging VND5 trillion. This expansion brought the total number of participating banks to eight and the total pledged funding to VND140 trillion.
Despite the more available funding, only VND1.78 trillion had been disbursed for social housing projects as of the third quarter of 2024. A mere VND150 billion was allocated to just 12 projects for individual homebuyers.
The low disbursement rate is reportedly attributed to high interest rates and stringent lending conditions, making it difficult for low-income urban dwellers and factory workers to access affordable housing.
Currently, the interest rate for this soft loan is 7% per year for developers and 6.5% per year for homebuyers.
