Vietnam minister calls for easing $1.4 bil housing loan package rules

By Le Quan, Thanh Nien News

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Minister of Construction Trinh Dinh Dung (2nd R) visits an apartment block that was under construction in Hanoi last year. He has called for relaxing conditions for getting a loan from the VND30 trillion package. Photo: Le Quan
Minister of Construction Trinh Dinh Dung Thursday suggested that conditions for obtaining preferential home loans should be eased to speed up disbursement of the VND30 trillion (US$1.43 billion) loan package.
The package, unveiled last June, was expected to revive the property market, but only VND1.32 trillion has been disbursed as of March 15, according to the ministry.
At a meeting Thursday Dung called for scrapping the condition on the size of the apartment to qualify for a loan.
Borrowers are offered loans at 6 percent interest for 10 years to buy apartments measuring less than 70 square meters and costing no more than VND15 million per square meter.
Low-income earners, government workers, and military personnel who do not own a house or own housing measuring less than 8 sq.m per household member are eligible for the loans.
The stipulations on size and price per square meter should be scrapped, Dung said, and instead the value of the apartment should be capped at VND1.05 billion.
He also called for extending the payment term for individuals to 15 years from the current 10.
Buyers of low-income housing who signed a buying contract before January 7 last year but have yet to finish payment should be allowed to borrow, he suggested further.
He called for adding another category of borrowers and lending to them at just 4 percent to build or repair homes -- families living in the central region, where storms routinely destroy homes.
He wanted more banks to be added to the small list of five who lend at the moment.
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