Gov’t considers state-funded $1.2b credit package for social housing

A social housing project under construction in Long Khánh City, Đồng Nai Province. — VNA/VNS Photo

HCM CITY — The Government is considering implementation of a state-funded credit package worth VNĐ30 trillion (US$1.2 billion) for social housing to replace the current ineffective package.

Speaking at a conference on Thursday, Prime Minister Phạm Minh Chính instructed the Construction Ministry to conduct a ‘comprehensive’ study of the proposed credit package, which will be managed by Vietnam Social Policy Bank.

The package will target low-income homebuyers to obtain loans for purchasing and renting social housing in accordance with social policy objectives.

The new package will be state funded, which is different from the existing VNĐ120-trillion package exclusively financed through commercial banks.

The PM noted that half of the proposed funding will come from the issuance of government bonds, while the remainder will be allocated from local budgets.

The PM has urged localities to prioritise the allocation of their local budgets to the Social Policy Bank for such social housing loans.

The PM emphasised the government’s commitment to social housing development as a priority for development in the near future.

Current package

The existing VNĐ120 trillion package, which does not include state budget support, offers preferential loans from commercial banks at rates 1.5 to 2 per cent lower than standard lending rates.

But the disbursement results remain sluggish with only over 1 per cent, or VNĐ1.2 trillion, disbursed after one year, according to the ministry.

The ministry aims to build at least one million social housing units by 2030, as mandated by the government.

Statistics from the ministry showed that to date, 30 localities have announced 72 projects deemed eligible for the VNĐ120 trillion package.

More than 500 social housing projects are underway across Việt Nam, of which 75 have been completed, resulting in a total of nearly 40,000 apartments. — VNS