VNRE - Builders of low-income housing have been unable to obtain preferential loans from the Viet Nam Development Bank despite Government Resolution No 18 ordering the bank to extend them priority for low-interest loans.
Deputy Minister of Construction Nguyen Tran Nam said the ministry and the Central Steering Committee on Housing Policies and the Real Estate Market have urged the Viet Nam Development Bank to begin lending to these projects in accordance with the resolution.
However, the bank's general director, Nguyen Quang Dung, said the delays were due to a lack of certificates of land use rights needed to secure a mortgage loan. Current regulations required that individuals and organisations present the certificates, Dung said.
Dung also took issue with the ministry's list of 43 low-income housing projects – worth a combined VND6.6 trillion (US$330 million) – saying that many were ineligible for the preferential loans.
A number of project developers have cried foul, however, noting that the Government had not issued land use certificates in cases where the land use fees had been waived.
They would only receive the certificates once the housing projects were completed, they noted.
Bui Duc Long, general director of Vincon Land and Finance Investment Joint Stock Co, developer of a number of low-income housing projects in the central cities of Hue and Da Nang, said his bank had yet to receive any loans from the Viet Nam Development Bank even after meeting with the bank, the construction ministry, and provincial authorities to try and resolve the issue.
Meanwhile, the company had plans to borrow from commercial banks to complete the unfinished projects due to the company's responsibility to society, Long said, but no new projects would be commenced without access to preferential financing.
Vincon was the first commercial developer that undertook development of low-income apartments, investing about VND200 billion ($10 million) in about 300 housing units in Da Nang and another 600 in Hue.
Another 600-unit development was waiting on preferential financing before proceeding.
Son An Urban Development and Investment Co chairman Nguyen Khac Son said it had invested VND33 billion ($1.65 million) out of a total estimated cost of VND55 billion ($2.75 million) for its low-income housing project in the southern province of Dong Nai and had yet to receive preferential financing since construction began in October.
Construction to date, he said, had been financed through commercials banks at interest rates of 17-18 per cent per year.
Dung said the Viet Nam Development Bank would answer businesses by the end of this month as to whether they would be able to access the loans, but he said the bank would make no commitments if the issue over regulations on mortgages and land use certificates were not resolved.
The bank could not violate the law which required land use right certificates as security for mortgage loans, Dung said.