Construction Ministry proposes $4.7B social housing credit

By Duc Minh   February 15, 2023 | 03:31 pm PT
Construction Ministry proposes $4.7B social housing credit
A social housing neighborhood in HCMC's Binh Tan District, August 2022. Photo by VnExpress/Quynh Tran
The Ministry of Construction has proposed that the National Assembly and the Government set aside a credit package of VND110 trillion (US$4.66 billion) for the development of social housing.

The proposal, in a document prepared by the ministry for a conference on promoting the development of the real estate market this weekend, aims to have commercial banks lend the money to renters, buyers or developers of social housing projects and workers’ housing projects.

Other details have not been released, but the ministry said it would be similar to a VND30-trillion credit package implemented during a previous market downturn 2013-2016.

The previous VND30-trillion package saw 70% of the loans reserved for renters and buyers of social and commercial housing with an area of less than 70 square meters and a selling price of less than VND15 million per square meter. The maximum loan term was 10 years.

The remaining 30% was for developers of social housing projects, and of commercial housing projects to be converted into social housing.

In 2021, the Ministry of Construction also proposed to add a 2022-2023 economic recovery program credit package of VND65 trillion for social housing and houses for workers. However, to date, the VND65-trillion proposal has not made any further progress.

The Ministry of Construction has asked the National Assembly to pilot a number of policies promoting the development of social housing.

According to the Ministry of Construction, investment in social housing for low-income workers should be sourced from the medium and long-term capital of cities and provinces.

The ministry also proposed the expansion of credit in general for the next few years to help spur the economy. The reduction of lending interest rates would be a key step towards supporting the real estate market.

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