Circular No. 32/2014/TT-NHNN Amending and Supplementing Certain Provisions of Circular No. 11/2013/TT-NHNN dated May 15, 2013 on Housing Support Loans pursuant to Resolution No. 02/NQ-CP dated January 7, 2013 of the Government

 

Circular

Amending and supplementing certain articles of Circular No. 11/2013/TT-NHNN  dated May 15, 2013 on housing support loans pursuant to Resolution No. 02/NQ-CP dated January 7, 2013 of the Government

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Pursuant to the Law on the State Bank of Vietnam 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 dated November 29, 2005;

Decree No. Decision No. 156/2013/ND-CP dated November 11, 2013 on the functions, tasks, powers, and organizational structure of the State Bank of Vietnam;

Decree No. Decree No. 71/2010/ND-CP dated June 23, 2010 of the Government detailing and guiding the implementation of the Law on Housing;

Pursuant to Resolution No. 02/NQ-CP dated January 7, 2013 of the Government on several measures to address difficulties in production and business, support markets, and resolve bad debts; Resolution No.48/NQ-CP dated April 4, 2013 of the Government on the regular monthly session of the Government in March 2013 and Decision No. 61/NQ-CP dated August 21, 2014 of the Government amending and supplementing Decision No. 02/NQ-CP dated January 7, 2013 of the Government on several measures to address difficulties in production and business, support markets, and resolve bad debts;

At the proposal of the Director of the Department of Credit for Economic Sectors;

The Governor of the State Bank of Vietnam promulgates this Circular amending and supplementing certain articles of Circular No. 11/2013/TT-NHNN dated May 15, 2013 on housing support loans pursuant to Resolution No. 02/NQ-CP dated January 7, 2013 of the Government.

Article 1. Amending and supplementing certain articles of Circular No. 11/2013/TT-NHNN dated May 15, 2013 of the State Bank of Vietnam on housing support loans pursuant to Resolution No. 02/NQ-CP dated January 7, 2013 of the Government (hereinafter referred to as Circular No. 11/2013/TT-NHNN ):

1. Amend and supplement Article 1 as follows:

"Article 1. Scope of regulation and application subjects

2. Applicability:

a) This Circular stipulates housing support loans from rediscount funds of the State Bank of Vietnam (hereinafter referred to as the State Bank) pursuant to Resolution No. 02/NQ-CP dated January 7, 2013 of the Government on several measures to address difficulties in production and business, support markets, and resolve bad debts, Resolution No. 48/NQ-CP dated April 4, 2013 of the Government on the regular monthly session of the Government in March 2013, and Resolution No. 61/NQ-CP dated August 21, 2014 of the Government amending and supplementing Resolution No. 02/NQ-CP;

b) Commercial banks owned by the State and commercial joint-stock banks in which the State holds more than 50% of the charter capital shall allocate a minimum amount of at least 3% of their total loan balance at the end of the previous year for lending to the objects specified in Point 2 of this Article.

2. Application subjects:

a) Borrowers (hereinafter referred to as customers) include:

- Civil servants, public officials, military personnel, and low-income individuals borrowing to purchase, lease, or lease-purchase social housing and to lease or purchase commercial housing with an area of less than 70 square meters and a selling price below 15,000,000 VND per square meter;

- Civil servants, public officials, military personnel, workers, and low-income individuals who have difficulty accessing housing when purchasing commercial housing in housing development projects or urban development projects that have been approved and licensed, with a total transaction value (price of house and land) not exceeding 1,050,000,000 VND;

- Civil servants, public officials, military personnel, and workers in urban areas who already own land suitable for their housing plans but face difficulties in housing and have not received any form of state support can borrow to build new or renovate their existing housing;

- Households and individuals with plans to renovate or construct social housing in compliance with legal regulations for leasing, lease-purchasing, and selling to industrial workers, employees in small and medium-sized industrial zones, export processing zones, economic zones, high-tech zones, industrial production bases, handicraft workshops, factories, and enterprises (for all parties, including businesses); employees in various economic sectors in urban areas; students in universities, colleges, vocational schools, technical colleges, and training institutions for industrial workers (both public and private); and other eligible recipients under the provisions of Government Decree No. 188/2013/ND-CP dated November 20, 2013 on the development and management of social housing;

- Enterprises that are developers of social housing projects and enterprises that are investors in commercial housing projects converted to social housing projects constructed during any period (hereinafter referred to as enterprises).

b) Banks lending according to this Circular (hereinafter referred to as banks) include:

- Commercial banks in which the State holds more than 50% of the charter capital, including: Vietnam Agricultural and Rural Development Bank; Vietnam Joint Stock Commercial Bank for Investment and Development; Vietnam Joint Stock Commercial Bank for Industry and Trade; Vietnam Joint Stock Commercial Bank for Foreign Trade; Vietnam Joint Stock Commercial Bank for Southern Housing Development;

- Other joint-stock commercial banks designated by the State Bank. Within 30 days from the effective date of this Circular, joint-stock commercial banks wishing to participate must submit a written request to join the housing support loan program according to Model Form No. 04 attached to this Circular to the State Bank. The State Bank will base its decision on the scale, scope of operations, and experience in lending to the real estate investment and business sector of these banks.

c) Relevant organizations and individuals."

2. Amend and supplement Article 3 as follows:

"Article 3. Loan Conditions

In addition to the loan conditions prescribed by current laws for credit institutions' loans to customers and those stipulated in Circular No. 07/2013/TT-BXD dated May 15, 2013 of the Ministry of Construction on guidelines for determining the objects eligible for housing support loans pursuant to Resolution No. 02/NQ-CP dated January 7, 2013 of the Government and subsequent amendments and supplements to Circular No. 07/2013/TT-BXD, customers must also meet the following additional conditions:

1. For individual customers borrowing to purchase, lease, or lease-purchase social housing; or to lease or purchase commercial housing:

a) Have a contract for the purchase, lease, or lease-purchase of social housing; or a contract for the lease or purchase of commercial housing with the owner;

b) Has the purpose of borrowing funds to pay off outstanding amounts for purchasing, renting, or leasing social housing; renting or buying commercial housing with an area less than 70 square meters and a selling price below 15,000,000 VND per square meter for contracts signed with developers from January 7, 2013; or has the purpose of borrowing funds to pay off outstanding accounts with landlords arising from August 21, 2014, to purchase commercial housing with a reasonable total value of the sale contract (selling both house and land) not exceeding 1,050,000,000 VND;

c) Proposes to borrow funds to purchase, rent, or lease social housing; rent or buy commercial housing and commits that customers and members of the customer's household have not yet received support loans at banks as stipulated in this Circular;

d) Has the minimum capital required to participate in the loan scheme as provided for in Clause 5 of this Article.

2. For individual customers borrowing to build new or improve the repair of their housing:

a) Has the purpose of borrowing funds to pay off outstanding expenses incurred from August 21, 2014 (excluding taxes and fees) for building new or renovating and repairing their housing;

b) Proposes to borrow funds to build new or improve the repair of their housing and commits that customers and members of the customer's household have not yet received support loans at banks as stipulated in this Circular;

c) Has the minimum capital required to participate in the loan scheme as provided for in Clause 5 of this Article.

3. For household and individual customers with investment plans to renovate or build new social housing:

a) Has the purpose of borrowing funds to pay off outstanding expenses incurred from August 21, 2014 (excluding taxes and fees) for implementing projects to renovate or build new social housing;

b) Supports the proposal to borrow funds to start renovation or construction of social housing and commits that new customers and members of the customer's household have not yet received support loans at banks to implement the aforementioned projects and plans as stipulated in this Circular;

c) Has the minimum capital required to participate in the project or loan plan as provided for in Clause 5 of this Article.

4. For corporate customers:

a) Is a business entity as defined in point a, Clause 2, Article 1 of this Circular;

b) Has the goal of borrowing funds to pay off outstanding expenses incurred from January 7, 2013 (excluding taxes and fees) for implementing projects to build social housing or convert commercial projects to social housing as stipulated in this Circular;

c) Proposes to borrow funds to implement projects to build social housing or convert commercial projects to social housing and commits that they have not yet received support loans at banks to implement the aforementioned projects as stipulated in this Circular;

d) Has the minimum capital required to participate in the project or loan plan as provided for in Clause 5 of this Article.

5. The minimum capital of customers participating in the project or loan plan:

a) At least 20% of the value of the loan plan for the provisions of customers in Clause 1 of this Article;

b) At least 30% of the cost of building new or improving the repair of housing for the provisions of customers in Clause 2 of this Article;

c) At least 30% of the total investment capacity of the loan plan for the provisions of customers in Clause 3 of this Article;

d) At least 30% of the total investment capacity of the project or loan plan for the provisions of customers in Clause 4 of this Article.

6. In cases where individual customers purchase, rent, or lease social housing, or rent or buy commercial housing without having signed a purchase, rental, or lease agreement with the developer but meet all other borrowing conditions, the bank may issue a commitment to lend after the customer completes signing the purchase, rental, or lease agreement with the developer.

3. Amend and supplement Clause 4 of Article 4 as follows:

"4. The period for applying interest rates on loans as provided in this Article:

a) Maximum 15 years for customers purchasing, renting, or leasing social housing; renting or buying commercial housing, starting from the first disbursement date of the customer, but not exceeding June 1, 2031;

b) Maximum 10 years for customers building new or improving the repair of their housing, starting from the first disbursement date of the customer, but not exceeding June 1, 2026;

c) Maximum 5 years for corporate customers and household or individual customers investing in the renovation or construction of new social housing, calculated from the first disbursement date of the customer, but not exceeding June 1, 2021."

4. Amend and supplement Article 5 as follows:

"Article 5. Loan Period and Authority

1. The loan period is agreed upon by the customer and the bank, but the period for applying the fixed interest rate specified in this Circular shall not exceed the period specified in Clause 4 of Article 4 of this Circular.

2. The maximum loan amount for a customer, agreed upon by the bank and the customer, must comply with the provisions of Clause 5, Article 3 of this Circular and shall not exceed the national average limit of 700,000,000 VND per customer for customers borrowing to build new or improve the repair of their housing."

5. Amend and supplement Article 8 as follows:

a) Amend Clause 3 as follows:

"3. Re-lending period: except for re-lending debts according to the notification of the State Bank as stipulated in point d, Clause 5, Article 4 of this Circular, the re-lending period for each loan to support housing is 364 days and automatically extended for the remaining balance at the time of maturity by one (1) period equal to the initial lending period. By 2031, the remaining balance of the customer at the bank after the expiration of the loan support application period specified in Clause 4 of Article 4 of this Circular will be converted to a commercial loan using the bank's own capital."

b) Amend point b, Clause 5 as follows:

"b) Monthly, no later than the fifth day of the following month immediately after the reporting month, the bank sends a letter and report on the results of the housing support loan according to the model attached as Appendix No. 02 of this Circular to the State Bank (Department of Credit for Economic Sectors) as the basis for the State Bank to disburse funds or recover re-lending debts;"

c) Amend Point c (i) of Account 5 as follows:

"i) The bank shall submit a request for refinancing credit according to the form attached as Appendix No. 01 of this Circular, along with the request and a report on the results of housing support loans;"

d) Amend Point d (iv) of Account 5 as follows:

"iv) By no later than June 1, 2031, the bank must repay the entire principal and interest of the refinancing credit to the State Bank;"

6. Amend Account 4 of Article 10 as follows:

"4. After determining and planning to decide on a loan to a business, the bank shall submit a loan registration letter to the State Bank according to the form attached as Appendix 03 of this Circular, and may only enter into a contract with the business after receiving notification from the State Bank that there are remaining resources available for this category;"

7Add Appendices No. 01, No. 02, No. 03, and No. 04 attached to this Circular.

Article 2. Repeal Appendices 01 and 02 attached to Circular No. 11/2013/TT-NHNN .

Article 3. Provisions on Implementation

1. This Circular takes effect from November 25, 2014.

2. For loan accounts established before this Circular takes effect, the parties continue to implement the signed credit contracts. In cases where borrowers have signed credit contracts prior to the effective date of this Circular for purchasing, leasing, renting social housing, or buying and renting commercial housing with a loan term of 10 years, they are entitled to adjust the application period for preferential lending rates as stipulated in Account 3 of Article 1 of this Circular.

3. The Director of the Office, Heads of the Credit Department for Economic Sectors, Heads of units under the State Bank; Governors of the State Bank branches in provinces and centrally-administered cities; Chairmen of the Board of Members, Chairmen of the Board of Directors, and General Managers (Directors) of commercial banks are responsible for organizing the implementation of this Circular.