The 4.8% Preferential Loan Package Goes Bankrupt?

At the end of this month, the 4.8% loan package will expire. However, none of the customers received this loan because of no money.

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In July, the Social Policy Bank announced a preferential loan package at a discount rate of 4.8% for low-income people who want to buy or rent a social house or to build and repair a house for living.

Accordingly, the maximum lending capital level is equal to 80% of the value of the contract on a purchase or hire purchase of social houses. The overdue interest rate is equal to 130% of the lending interest rate. The minimum loan term is 15 years and a maximum of 25 years.

The beneficiaries of the loans are people with meritorious services to the revolution, low-income people, poor and near-poor households in urban areas. Officers, non-commissioned officers, professional soldiers, cadres, civil servants…

However, since the disclosure of information to date, the Social Policy Bank has not disbursed any capital in the package of preferential loans. The main cause is no capital.

In Saigon, working for less than ten years, Doan Thanh Tra in Thang Binh district, Quang Nam province always wanted to have a stable place. He used to file for social housing in District 12 but his application was not approved.

When knowing that there is a package of preferential loans with interest rate of 4.8%, he warmly embarked on the opportunity to buy a cheap house once again. “The couple earns about VND13 million. Unless we pay for living expenses, we can not pay back our mortgage loans in return for commercial banks, “Tra said.

After the VND30 trillion package, home buyers are waiting for the new package

From July to now, he occasionally ran to the Bank for Social Policy Ho Chi Minh City asked for a 4.8% preferential loan package but the answer is nothing new at all.

“At the end of this month, the 4.8% incentive package will expire. When it comes to capital, we have to make a lot of records, prove income … so it takes a lot of time. Surely the poor like us will not be able to borrow money from this incentive package. The dream to be settled back to wait, “he sighed.

You can view more listings of projects being sold in Ho Chi Minh City: Apartments for sale in Ho Chi Minh City

Businesses save themselves

Talking to reporters, Le Hoang Chau, chairman of the HCM City Real Estate Association, said that the package of loans at a preferential interest rate of 4.8% is only a pie, but in fact, no money is disbursed.

The implementation of this policy is being hampered by the lack of funds from the budget because of different opinions among ministries and sectors. For example, the Ministry of Finance re-stipulates lending interest rates at the maximum lending interest rate decided by the Governor of the State Bank for priority areas and short terms.

No interest rate difference subsidy is provided because, with this provision, borrowers who invest in the construction of social houses have enjoyed preferential treatment. Regarding the capital sources, the State Bank shall lend to the credit institutions the refinancing with the current refinancing interest rate.

The real estate market is lacking in affordable housing

Meanwhile, the Ministry of Planning and Investment said that the State budget for development investment is still difficult, the need for frequent large expenditures. Therefore, it is necessary to mobilize other non-budgetary sources to implement the preferential loan package of 4.8%.

“It is the responsibility of the ministries and agencies to do so as provided for in the Housing Law. We have repeatedly petitioned the Government to arrange 500-1 trillion VND each year for the poor to buy social housing. The loan package in 2016 is deemed to have expired. Hopefully, in 2017, the Government will allocate capital, “Chau said.

While the 4.8% incentive is only on paper because of lack of funds, many businesses have to manage themselves. Hoang Quan Real Estate Company announced the policy of interest rate support for customers buying social housing by his investors.

Accordingly, since November, customers have demand for bank loans at commercial interest to pay for apartment purchase, Hoang Quan Company will support customers interest rates in excess of 6% per year. The bank applies for commercial loans, with a maximum duration of no more than 15 years.

Objects supported by Hoang Quan are new customers who are eligible to buy social houses as stipulated in Decree 100 or old customers who are eligible to buy social housing but have not been allowed to borrow VND 30,000 billion.

Currently, the interest rates applied by banks for individuals to buy houses range from 9-10%. Therefore, Hoang Quan has to compensate about 3 – 4% interest rate for customers.

“When launching this program, there will be around 5,000 customers supported. Every year, the amount of money that Hoang Quan has to offset is from 60 to 80 billion. We will reduce the company’s profit to about 6%, “said Truong Anh Tuan, chairman, and CEO of Hoang Quan.

The suspension of the VND30 trillion loan package and the 4.8% preferential loan package that was not implemented had a great impact on Hoang Quan’s business plan. In 2016, the company set a post-tax profit of VND500 billion. However, in the first 9 months, the profit was only VND 65 billion.

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