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Construction Ministry proposes VND65 trillion credit package for social housing development

The Ministry of Construction (MOC) is seeking approval from the Prime Minister for a VND65 trillion credit package as a part of socio-economic recovery in the post-Covid period.

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The money would be used for social housing projects.

The credit package includes two component packages, worth VND15 trillion and VND50 trillion.

The first package involves the 2021-2025 medium-term public investment plan which includes VND14 trillion to be allocated to the Bank for Social Policies, which would disburse the capital to individual clients under the Housing Law to fund their house purchases, leasing and repair.

The other VND1 trillion would be allocated to commercial banks designated by the State to disburse capital to housing project developers and individual clients eligible for support in social housing.

The second package, worth VND50 trillion (25 percent of the total VND220 trillion worth of capital needed in 2021-2025) would be provided to commercial banks under the State Bank’s refinancing, which would disburse money to people belonging to the preferential lending program.

The credit component package would target workers in industrial zones who want to buy or lease houses; and to investors of the projects developing accommodations for sale to IZ workers.

According to MOC, housing for a high number of workers, especially in the south, including HCM City, Binh Duong, Dong Nai and Long An, faces problems.

The ministry emphasized that social housing products, especially housing for workers that ensures safety and healthy conditions is a necessary solution to help the economy recover. It will also help implement the Program on Sustainable Economy Recovery by 2023 mentioned in the Government’s Resolution dated July 14, 2021.

Experts, applauding the proposal, said this would serve as “bait capital” necessary for the development of social housing projects in the time to come.

The deployment of the VND30 trillion credit package in previous years showed the important role of so-called bait capital from the State budget in the development of low-cost housing projects.

As of December 31, 2016, when the disbursement of the program ended, VND29.679 trillion had been provided, or 98.93 percent of the estimated capital, which benefited both investors and hundreds of thousands of buyers.

The VND30 trillion package also helped restructure the products of the real estate market, prioritizing the development of affordable housing projects that satisfy real accommodation demand. This also helped defrost the real estate market, facilitating people’s purchases and transactions, and accelerating the consumption of inventory products.

About 294,600 houses are in demand from low-income earners in urban areas and Industrial Zone workers in 2021-2025 with total investment capital of VND220 trillion. 

Thuan Phong

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