HoREA offers preferential interest rate for loans to buy social housing 3 – 3.5% / year

Ho Chi Minh City Real Estate Association (HoREA) agreed with the Prime Minister’s decision on preferential lending interest rates of the Bank for Social Policy, credit institutions specified by the State to buy and rent to buy social houses of 4.8% per year.

The Association believes that this is the first time since the 2014 Housing Law takes effect (July 1, 2015) until now, the Government has consistently applied interest rates for social housing loans at the Policy Bank. 4.8% / year in social and state-appointed credit institutions. Before that, in the 2016-2020 period, the Prime Minister annually decided on the social housing loan interest rate at the Social Policy Bank to be 4.8% / year; The State Bank decides that the interest rate for social housing loans at state-appointed credit institutions is equivalent to 5% / year (in principle, about half of the lending interest rate of commercial banks).

HoREA offers preferential interest rate for loans to buy social housing 3 – 3.5% / year The HCM City Real Estate Association recommends many preferential policies for social housing. Photo: Khong Chiem

Many shortcomings in the preferential credit policy for social housing

However, the Association still sees many limitations and disadvantages in the implementation of financial policies and credit incentives for social housing in the period 2015-2020. Accordingly, investors of social housing projects are not allowed to borrow credit incentives, must borrow commercially at an interest rate of about 9% / year and this cost is calculated into the selling price, rental price, rent for buying social houses. This leads to the social housing unit price up to VND 18-20 million/m2, higher than VND 13-15 million/m2 in the period 2011 – 2015.


Social housing buyers and tenants hardly have access to preferential loans to buy, rent and buy social housing. In the past 5 years, because Resolution 1023 of the National Assembly Standing Committee on the list of priorities for the use of capital from the medium-term public investment budget in the 2016-2020 period, there is no spending list for the implementation of social housing policies. It is almost impossible to arrange state budget capital to refinance, or to subsidize interest rates to, the Social Policy Bank and 4 commercial banks designated by the State Bank to implement social housing policy.

The Association also mentioned that the housing law stipulates that investors of social housing projects for rentals only enjoy more tax incentives, but in fact has not been applied. At the same time, the regulations also reveal the need to deposit social housing savings at the Social Policy Bank so that people can borrow at preferential interest rates.

Proposing a preferential interest rate of 3 – 3.5% / year in the long term

The Association proposes the State Bank to submit to the Prime Minister for consideration and decision on preferential lending interest rate of 4.8% / year, applicable to both buyers of social and commercial housing according to the Resolution 2 days 7 / 1/2013 of the Government (preferential credit package of 30,000 billion VND), to ensure consistency and continuity of policies.

In the long term, when the economy develops stronger, HoREA suggests the Government to consider applying a preferential interest rate for social housing loans at about 3 – 3.5% / year to create more favorable conditions for middle-income, urban low-income people, as many countries do.

The Association recommends that the Government work with the Standing Committee of the National Assembly to record the list of expenditures on implementation of social housing policies in the Resolution of the National Assembly Standing Committee “On the list of priorities for use of medium-term public investment budgets for the period 2021-2025”. This creates conditions for re-funding budgets, interest rate compensation for the Bank for Social Policy and banks Vietcombank, Vietinbank, Agribank, BIDV, which have “bait” capital from the state budget to implement social housing policies, creating conditions for investors of social housing projects and buyers. , renting and buying social houses may borrow concessional loans.


HoREA also offers investors of social housing projects to borrow preferential credit loans at Bank for Social Policies and at banks Vietcombank, Vietinbank, Agribank, and BIDV. At the same time, the regulations must deposit savings at the Bank for Social Policies to get preferential loans to buy and rent social housing proposed by HoREA to suspend, immediately apply for 2021 and may consider extended pause.

Finally, the Association recommends that investors of social housing projects for rentals enjoy more tax incentives, a 70% reduction in value-added tax and corporate income tax.

Source: ndh.vn – Translated by fintel.vn

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