Official Dispatch 2308/NHNN-TD 2023 grant loans for purchasing social houses and houses for workers

In Resolution No. 33/NQ-CP dated March 11, 2023, on a number of solutions to remove difficulties for and promote safe, healthy, sustainable development of the real estate market, the Government assigned the State Bank of Vietnam to “assume the prime responsibility for implementing the credit program of about VND 120,000 billion to direct commercial banks, with 4 state-owned commercial banks (Agribank, BIDV, Vietcombank, Vietinbank) as the core force, to grant loans for investors and buyers of houses of social housing projects, projects of workers' houses, and projects of renovation and rebuilding of old apartment buildings with interest rates during the preferential period 1.5-2% lower than the average medium-term and long-term VND lending rates of the above state-owned commercial banks in the market and eligible non-state commercial banks with specific credit packages in each period”. To implement the assigned tasks, on the basis of the consensuses and written participations of 4 state-owned commercial banks, the State Bank of Vietnam (hereinafter referred to as the State Bank) provides some instructions and requests commercial banks and State Bank branches of provinces and cities as follows:

1. Regarding the Program contents:

1.1. Regarding eligible borrowers:

Eligible borrowers (hereinafter referred to as customers) include legal entities, persons investing in projects and buying houses of social housing projects, projects of workers' houses, and projects of renovation and rebuilding of old apartment buildings in the list of projects announced by the Ministry of Construction according to regulations, including:

- Customers who are investors.

- Customers who are buyers of houses of projects (hereinafter referred to as house buyers).

1.2. Regarding lending principles:

- Customers must satisfy conditions for entitlement of policies on supporting social houses and workers’ houses, renovating and rebuilding old apartment buildings in accordance with laws and the Ministry of Construction's guiding documents; satisfy conditions for capital borrowing as prescribed by laws.

- Each house buyer may be entitled to the loan under this Program only once to buy an apartment of the project in the list announced by the Ministry of Construction according to regulations; one project of an investor may be granted a loan under this Program only one time.

1.3. Implementation period:

Time limit for disbursement of the Program is the time the disbursed turnover reaches VND 120,000 billion, but not later than December 31, 2030.

1.4. Preferential period:

- Investors: Shall be entitled to the lending interest rates in the preferential period of 3 years, from the disbursement date, but not later than the loan maturity date at the initial loan agreement.

- House buyers: Shall be entitled to the lending interest rates in the preferential period of 5 years, from the disbursement date, but not later than the loan maturity date at the initial loan agreement.

1.5. Lending interest rates during the preferential period:

- Lending interest rate applied until the end of June 30, 2023, applicable to investors is 8.7%/year;

- Lending interest rate applied until the end of June 30, 2023, applicable to house buyers is 8.2%/year;

From July 1, 2023, every 6 months, the State Bank shall announce the lending interest rates during the preferential period for commercial banks participating in the Program.

1.6. Lending interest rates after the preferential period: Lending interest rates shall be agreed upon by commercial banks and customers, ensuring compliance with law provisions, and must be clearly defined or the determination of lending interest rates must be clearly defined in the loan agreements signed between customers and banks.

2. Based on contents specified in Section 1, Agribank, BIDV, Vietcombank and Vietinbank shall urgently implement the Program from April 1, 2023, and promulgate consistent instructions on the implementation of the Program on the system.

Other commercial banks participating in the Program must follow instructions provided in this Official Dispatch, and send a written report on the participation of the Program to the State Bank (via the Department of Credit for Economic Sectors, the Monetary Policy Department and the Banking Supervision Agency), at the same time, send a written registration for Program information exploitation to the National Credit Information Center of Vietnam.

3. Commercial banks shall grant loans for customers to implement the Program with their self-mobilized capital. Commercial banks shall be responsible for reviewing, appraising and deciding to grant loans to customers in accordance with the loan law, and take responsibility for their lending decisions. Commercial banks shall classify debts, set up provisions and handle risks of loans granted under this Program in accordance with law provisions.

4. Any difficulties arising during the lending under this Program should be promptly reported to the State Bank (via the Department of Credit for Economic Sectors). On a monthly basis (before the 10^th of the following month), commercial banks shall report the Program implementation results (made according to Appendix 01) to the State Bank; at the same time, send a periodic report made according to Appendix 02 to the National Credit Information Center of Vietnam.

5. State Bank branches of provinces and cities shall:

- Direct the implementation, monitoring, inspection and supervision of the grant of loans by commercial banks participating in the Program in localities; timely report arising difficulties to the Governor of the State Bank.

- Coordinate with Departments and Branches of provinces and cities in granting loans by commercial banks participating in the Program in localities; timely advise the provincial-level People’s Committees to settle difficulties arising in the course of implementation.

The State Bank of Vietnam hereby requests commercial banks and State Bank branches of provinces and cities to implement in an urgent manner./.

* All Appendices are not translated herein.