CIRCULAR

INSTRUCTIONS ON CONCESSIONAL LOANS FOR IMPLEMENTATION OF SOCIAL HOUSING POLICIES

Circular No. 25/2015/TT-NHNN dated December 9, 2015 of the Governor of the State bank of Vietnam on instructions on concessional loans for implementation of social housing policies, coming into force as of December 10, 2015, amended by:

Circular No. 20/2021/TT-NHNN dated November 30, 2021 of the Governor of the State bank of Vietnam on amendments to Circular No. 25/2015/TT-NHNN dated December 9, 2015 of the Governor of the State bank of Vietnam on instructions on concessional loans for implementation of social housing policies, coming into force as of January 20, 2022.

Pursuant to the Law on State Bank No. 46/2010/QH12 dated June 16, 2010;

Pursuant to the Law on credit institutions No. 47/2010/QH12 dated June 16, 2010;

Pursuant to the Law on Housing No. 65/2014/QH13 dated November 25, 2014;

Pursuant to the Government's Decree No. 156/2013/NĐ-CP dated November 11, 2013 defining the functions, tasks, entitlements and organizational structure of the State bank of Vietnam;

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At the request of general director of SBV Credit Department;

Governor of the State Bank promulgates the Circular providing guidance on provision of concessional loans for implementation of social housing policies in Decree No. 100/2015/ND-CP dated October 20, 2015[1].

Article 1. Governing scope

1.[2] This Circular provides guidance on provision of concessional loans for implementation of social housing policies to appointed credit institutions as prescribed in Decree No. 100/2015/ND-CP dated October 20, 2015 of the Government on development and management of social housing and Decree No. 49/2021/ND-CP dated April 1, 2021 of the Government on amendments to Decree No. 100/2015/ND-CP.

2. Loans provided by the bank for social policies and loans obtained by persons as prescribed in Clauses 1, 2, 3, Article 49 of the Law on Housing for construction, renovation or repairs of houses according to specific provision set out in the Target program decided by the Government, the Prime Minister are not subject to the governing scope hereof.

3. Loans for solving difficulties for production and business, market support, handling of bad debts and guiding documents issued by competent agencies are not subject to the governing scope hereof.

Article 2. Regulated entities

1. Entities applying for loans to carry out investment and construction of social houses are prescribed in Clause 1, Article 15 of Decree No. 100/2015/NĐ-CP.

2.[3] Entities applying for loans to build or renovate, repair houses as prescribed in Clause 1, Article 16 of Decree No. 100/2015/ND-CP.  

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4. Organizations or individuals applying for loans from appointed credit institutions for implementation of social housing policies according to Decree No. 100/2015/ND-CP.

Article 3. Principles of loaning

1. Concessional loans should be made to the right entities and meet requirements as prescribed.

2. If an entity is eligible for various levels of concessional loans, the most advantageous one shall apply.

3. If a household has more than one member who is eligible for various levels of concessional loans, only one level shall apply to the whole household.

4. Appointed credit institutions shall grant concessional loans for social housing policies in accordance with laws on housing, credits and other relevant law provisions.

5. Appointed credit institutions shall be responsible for considering making loans according to applicable regulations.

Article 4. Eligible borrowers

Entities eligible for loans are prescribed in Clauses 1, 2, Article 2 of this Circular.

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Apart from requirements according to applicable regulations, borrowers should meet followings:

1. Borrowers as enterprises, cooperatives as prescribed in Points a, b, Clause 1, Article 15 of Decree No. 100/2015/ND-CP applying for loans for investment and construction of social houses should meet requirements as prescribed in Clause 2, Article 15 of Decree No. 100/2015/ND-CP.

2. Borrowers as households and individuals applying for loans for construction of social houses for lease, lease-purchase, and sale should meet requirements as prescribed in Clause 3, Article 15 of Decree No. 100/2015/NĐ-CP.

3.[4] (annulled)

4. Borrowers as prescribed in Clause 2, Article 2 hereof applying for loans to construct or renovate, repair houses should meet requirements as prescribed in Clause 3, Article 16 of Decree No. 100/2015/ND-CP.

Article 6. Level of loans

Appointed credit institutions shall make decision on level of loans to borrowers in reliance on borrowers’ demands, creditworthiness and their own capital sources, specifically:

1. Construction of social houses for lease: Maximum level shall be 80% of total project investment and not exceed 80% of loan collateral.

2. Construction of social houses for lease purchase, for sale:  Maximum level shall be 70% of total project investment and not exceed 70% of loan collateral.

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4.[6] Construction or renovation of houses: Maximum level shall be 70% of cost estimates or borrowing plan, up to VND 500 million and not exceeding 70% of loan collateral.

Article 7. Loan terms

1. For borrowers as prescribed in Clause 1, Article 2 hereof applying for loans to construct houses for lease, loan term shall be at least 15 years and not exceed 20 years since disbursement of the first loan.

2. For borrowers as prescribed in Clause 1, Article 2 hereof applying for loans to construct social houses for lease purchase, loan term shall be at least 10 years and not exceed 15 years since disbursement of the first loan.

3. For borrowers as prescribed in Clause 1, Article 2 hereof applying for loans to construct social houses for sale, loan term shall be at least 05 years and not exceed 10 years since disbursement of the first loan.

4.[7] Entities applying for loans to build or renovate, repair houses as prescribed in Clause 2, Article 2 of Decree No. 100/2015/ND-CP: the loan term shall be agreed upon by the bank and the borrower in line with the borrower’s creditworthiness and up to 25 years since the date of disbursal of the first loan.

5. Any borrower who needs to shorten minimum loan terms as prescribed in Clauses 1, 2, 3, 4 of this Article may negotiate with credit institutions.

Article 8. Loan currency

Loan currency is Vietnam dong.

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1. Appointed credit institutions shall carry out disbursement of loans to borrowers as prescribed in Clause 1, Article 2 hereof according to project implementation progress, plan and signed contracts. Disbursements shall be based on completed work quantity. Disbursements shall be based on completed work quantity.

2. Appointed credit institutions shall carry out disbursement of loans to borrowers as prescribed in Clause 2, Article 2 hereof according to a credit contract signed between borrower and credit institution.

3. Appointed credit institutions shall carry out disbursement, inspection and supervision of loans according to applicable regulations and the State bank of Vietnam's regulations.

Article 10. Loan interests

1. Concessional loan interests to borrowers for construction of social houses shall be stipulated by the State Bank over periods.

2.[8] Concessional loan interests to borrowers for construction or renovation, repair of social houses shall be stipulated by the State Bank from time to time.

3. Concessional loan interests as prescribed in Clauses 1, 2, this Article should ensure principles:

a)[9] Do not exceed 50% of average loan interest rates of all the banks in the market in the same period;

b) Concessional loan interest rates for borrowers applying loans for construction of social houses for lease are lower than the rates for borrowers applying loans for construction of social houses for lease purchase, sale.

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Appointed credit institutions shall provide detailed instructions on procedures on application for loans as follows:

1. Borrowers should prepare and deliver applications for loans to appointed credit institutions as prescribed.

2. Based on applications for loans delivered by borrowers, credit institutions shall carry out assessment and make decisions on loans as prescribed hereof.

Credit institutions shall make public announcement of maximum time limit for decisions to be made on loans.  In case a loan is declined, credit institutions shall make a written notice to the borrower on request.

3. Loans made by appointed credit institutions to borrowers shall be made in a contract. The contract should specify information on loans made by credit institutions according to applicable regulations.

Article 12. Classification of debts, establishment of provisions for handling of risks

1. Classification of debts, extension of debts, transfer of overdue debts, establishment and use of provisions for handling of risks by appointed credit institutions over loans for the implementation of social housing policies shall be implemented in accordance with the State Bank’s applicable regulations.

2. Handling of risk debts is carried out in accordance with the Prime Minister’s regulations.

Article 13.[10] (annulled)

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1. Provide adequate, authentic information in relation to loans and take responsibility for accuracy of such information;

2. Use loans purposefully and comply with terms and conditions of the credit contract and other commitments;

3. Pay principals and interests to the bank according to signed credit contract.

4. Borrowers are responsible for using loans with the given purpose and fully repaying the principal and interest on time according to the signed credit contracts; fulfilling commitments in credit contracts and relevant legal provisions.

Article 15. Responsibility of appointed credit institutions

1. Appointed credit institutions shall issue guiding documents on loans in accordance with this Circular and relevant law provisions.

2. Oversee, account for and manage loans for implementation of social housing policies;

3. Carry out inspection and supervision of loans to ensure borrowers use the loans with the given purpose and as committed in the credit contract;

4. Make monthly reports to the State Bank (SBV Credit Department) on provision of loans for implementation of social housing policies according to forms 01, 02 enclosed herewith and take responsibility for accuracy of the information and figures;

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1. SBV Credit Department:

a) Play a role as a center to monitor and compile information about lending activities by appointed credit institutions for implementation of social housing policies;

b) Act as an advisor for Governor of the State Bank in the appointment of credit institutions for providing loans for implementation of social housing policies;

c) Preside over and cooperate with relevant units in handling difficulties arising during the implementation of this Circular;

2.[11] Financial policy department

Act as an advisor for Governor of the State Bank in determining and making public announcement of concessional loan interests (of appointed credit institutions) to borrowers as prescribed in clause 1 and clause 2 Article 2 hereof.

3. Bank Supervision and Inspection Agency:

a) Carry out investigation and supervision of loans made by appointed credit institutions to borrowers according to law provisions;

b) Cooperate with SBV Credit Department and relevant units in handling issues arising during the implementation;

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a) Monitor and compile information about lending activities by appointed credit institutions for implementation of social housing policies in localities;

b) Provide advice and cooperate with People’s committees of central-affiliated provinces, cities in handling issues arising during the implementation of lending activities for social housing policies; Make immediate reports to the State Bank (SBV Credit Department) for issues beyond competence for consideration and handling;

Article 17. Effect[12]

This Circular takes effect since December 10, 2015.

Article 18. Implementation

Chief Officer, general director of SBV Credit Department, heads of affiliates of the State bank, director of branches of the State Bank of central-affiliated cities and provinces, Chairman of the Board of Members, President of the Board of Directors and general director (director) of appointed credit institutions, and borrowers shall be responsible for executing this Circular./.

AUTHENTICATION OF CONSOLIDATED DOCUMENT

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[1] Circular No. 20/2021/TT-NHNN dated November 30, 2021 of the Governor of the State bank of Vietnam on amendments to Circular No. 25/2015/TT-NHNN dated December 9, 2015 of the Governor of the State bank of Vietnam on instructions on concessional loans for implementation of social housing policies has the following legal bases:

“Pursuant to the Law on State Bank dated June 16, 2010;

Pursuant to the Law on credit institutions dated June 16, 2010 and Law on amendments to the Law on credit institutions dated November 20, 2017;

Pursuant to the Law on Housing dated November 25, 2014;

Pursuant to the Government's Decree No. 16/2017/NĐ-CP dated February 17, 2017 defining the functions, tasks, entitlements and organizational structure of the State bank of Vietnam;

Pursuant to the Government’s Decree No. 100/2015/NĐ-CP dated October 20, 2015 on development and management of social houses; Decree No. 49/2021/ND-CP dated April 01, 2021 on amending some Articles of Government’s Decree No. 100/2015/ND-CP on development and management of social housing;

At the request of general director of SBV Credit Department;

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[2] This clause is amended by clause 1 Article 1 of Circular No. 20/2021/TT-NHNN dated November 30, 2021 of the Governor of the State bank of Vietnam on amendments to Circular No. 25/2015/TT-NHNN dated December 9, 2015 of the Governor of the State bank of Vietnam on instructions on concessional loans for implementation of social housing policies, coming into force as of January 20, 2022.

[3] This clause is amended by clause 2 Article 1 of Circular No. 20/2021/TT-NHNN dated November 30, 2021 of the Governor of the State bank of Vietnam on amendments to Circular No. 25/2015/TT-NHNN dated December 9, 2015 of the Governor of the State bank of Vietnam on instructions on concessional loans for implementation of social housing policies, coming into force as of January 20, 2022.

[4] This clause is amended by clause 2 Article 2 of Circular No. 20/2021/TT-NHNN dated November 30, 2021 of the Governor of the State bank of Vietnam on amendments to Circular No. 25/2015/TT-NHNN dated December 9, 2015 of the Governor of the State bank of Vietnam on instructions on concessional loans for implementation of social housing policies, coming into force as of January 20, 2022.

[5] This clause is annulled by clause 2 Article 2 of Circular No. 20/2021/TT-NHNN dated November 30, 2021 of the Governor of the State bank of Vietnam on amendments to Circular No. 25/2015/TT-NHNN dated December 9, 2015 of the Governor of the State bank of Vietnam on instructions on concessional loans for implementation of social housing policies, coming into force as of January 20, 2022.

[6] This clause is amended by clause 3 Article 1 of Circular No. 20/2021/TT-NHNN dated November 30, 2021 of the Governor of the State bank of Vietnam on amendments to Circular No. 25/2015/TT-NHNN dated December 9, 2015 of the Governor of the State bank of Vietnam on instructions on concessional loans for implementation of social housing policies, coming into force as of January 20, 2022.

[7] This clause is amended by clause 4 Article 1 of Circular No. 20/2021/TT-NHNN dated November 30, 2021 of the Governor of the State bank of Vietnam on amendments to Circular No. 25/2015/TT-NHNN dated December 9, 2015 of the Governor of the State bank of Vietnam on instructions on concessional loans for implementation of social housing policies, coming into force as of January 20, 2022.

[8] This clause is amended by clause 5 Article 1 of Circular No. 20/2021/TT-NHNN dated November 30, 2021 of the Governor of the State bank of Vietnam on amendments to Circular No. 25/2015/TT-NHNN dated December 9, 2015 of the Governor of the State bank of Vietnam on instructions on concessional loans for implementation of social housing policies, coming into force as of January 20, 2022.

[9] This clause is amended by clause 5 Article 1 of Circular No. 20/2021/TT-NHNN dated November 30, 2021 of the Governor of the State bank of Vietnam on amendments to Circular No. 25/2015/TT-NHNN dated December 9, 2015 of the Governor of the State bank of Vietnam on instructions on concessional loans for implementation of social housing policies, coming into force as of January 20, 2022.

[10] This clause is annulled by clause 2 Article 2 of Circular No. 20/2021/TT-NHNN dated November 30, 2021 of the Governor of the State bank of Vietnam on amendments to Circular No. 25/2015/TT-NHNN dated December 9, 2015 of the Governor of the State bank of Vietnam on instructions on concessional loans for implementation of social housing policies, coming into force as of January 20, 2022.

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[12] Article 3 and Article 4 of Circular No. 20/2021/TT-NHNN dated November 30, 2021 of the Governor of the State bank of Vietnam on amendments to Circular No. 25/2015/TT-NHNN dated December 9, 2015 of the Governor of the State bank of Vietnam on instructions on concessional loans for implementation of social housing policies, coming into force as of January 20, 2022, stipulates as follows:

“Article 3. Responsibilities for implementation

Chief Officer, general director of SBV Credit Department, heads of affiliates of the State bank, appointed credit institutions, and borrowers shall implement this Circular.

Article 4. Implementation provision

This Circular takes effect since January 20, 2022./.”

[13] This form is replaced as prescribed in clause 1 Article 2 of Circular No. 20/2021/TT-NHNN dated November 30, 2021 of the Governor of the State bank of Vietnam on amendments to Circular No. 25/2015/TT-NHNN dated December 9, 2015 of the Governor of the State bank of Vietnam on instructions on concessional loans for implementation of social housing policies, coming into force as of January 20, 2022.

[14] This form is replaced as prescribed in clause 1 Article 2 of Circular No. 20/2021/TT-NHNN dated November 30, 2021 of the Governor of the State bank of Vietnam on amendments to Circular No. 25/2015/TT-NHNN dated December 9, 2015 of the Governor of the State bank of Vietnam on instructions on concessional loans for implementation of social housing policies, coming into force as of January 20, 2022.