Joint Circular No. 62/2003/TTLT-BTC-NHNN guides the implementation of policies for local ethnic minority households and policy-targeted households in the Central Highlands provinces to purchase houses on installment.

JOINT CIRCULAR

Guidelines for Implementing Policies for Ethnic Minority Households in Place and Policy-Directed Households in the Central Highlands to Purchase Housing on Installment

and households under policy support in the Northwest provinces purchase housing on an installment basis.

 

Pursuant to Decree No. 43/1999/NĐ-CP dated June 29, 1999 of the Government on State Investment Credit for Development;

Pursuant to Decree No. 78/2002/NĐ-CP dated October 4, 2002 of the Government on credit for the poor and other policy beneficiaries;

Pursuant to the Prime Minister's Decisions No. 168/2001/QĐ-TTg dated October 30, 2001 on long-term orientation, five-year plan from 2001 to 2005, and basic solutions for economic and social development in the Central Highlands; and No. 154/2002/QĐ-TTg dated November 11, 2002 on policies for ethnic minority households in place and policy-directed households in the Central Highlands to purchase housing on installment;

The Ministry of Finance and the State Bank of Vietnam hereby issue guidelines for implementing policies for ethnic minority households in place and policy-directed households in the provinces of Lam Dong, Dak Lak, Gia Lai, and Kon Tum as follows:

 

PART A. GENERAL PROVISIONS

Article 1. The Circular applies to ethnic minority households in place and policy-directed households in the provinces of Lam Dong, Dak Lak, Gia Lai, and Kon Tum, as guided by the Ministry of Labor, Invalids, and Social Affairs.

Article 2. The investment capital for constructing housing to sell on installment to ethnic minority households in place and policy-directed households in the provinces of Lam Dong, Dak Lak, Gia Lai, and Kon Tum includes: 50% of the total investment capital from the central budget, and the remaining 50% raised by the Social Policy Bank.

Article 3. People's Committees at all levels and households purchasing housing on installment must use the investment capital for its intended purpose, effectively, and be responsible for repaying the principal and interest to the Social Policy Bank according to the deadlines stipulated in this Circular.

Article 4. Households eligible to purchase housing on installment under Point 1 of Part A of this Circular (referred to as eligible households) do not need to mortgage assets when purchasing on installment. The State encourages eligible households to pay off their installment purchases ahead of schedule.

Article 5. Households are not allowed to sell, pledge, mortgage, or transfer ownership of the house before fully repaying the bank loan.

PART B. SPECIFIC PROVISIONS

I. ELIGIBLE HOUSEHOLDS FOR PURCHASE OF HOUSING ON INSTALLMENT

Clause 1. Conditions for purchasing housing on installment: Eligible households may purchase one (1) unit of housing on installment if they meet the following conditions:

Clause 1.1. Submit an application to purchase housing on installment, commit to using it for its intended purpose, and pay the installment price for housing on time.

Clause 1.2. Be included in the list approved for purchasing housing on installment by the provincial People's Committee.

Clause 2. Price of housing on installment, interest rate, installment period, and procedures for purchase:

Clause 2.1. Eligible households meeting the above conditions may purchase one unit of housing on installment with a maximum value of seven million dong. If the actual price of the house is lower than seven million dong, the household can purchase the house at the actual price. If the actual price is higher than seven million dong, the household must pay the difference themselves.

Clause 2.2. The maximum repayment period for purchasing housing on installment is ten years from the date of purchase, including a grace period of five years during which no principal or interest needs to be paid. Repayment begins in the sixth year after the purchase date, with a minimum annual payment equal to 20% of the total principal and interest due.

Clause 2.3. The interest rate for purchasing housing on installment is three percent per annum, applicable throughout the entire installment period, including the initial five-year grace period.

Clause 2.4. Based on the approved list of eligible households for purchasing housing on installment, the People's Committee (at the district or commune level as specified by the provincial People's Committee) will sign a confirmation for organizing the construction contract, installment payment, and the parties involved include:

The household purchasing the house,

The enterprise contracted to build the house,

The Social Policy Bank.

The contract shall include key contents such as: house model, floor area, house price, installment amount according to Points 2.1, 2.2, and 2.3 of Section II of Part B of this Circular, additional amount that the household must pay (if any), and payment conditions.

Clause 2.5. After the house is completed, the People's Committee (at the district or commune level as specified by the provincial People's Committee) will organize the handover of the house to each household, with the handover party consisting of:

The People's Committee,

The household receiving the house.

Clause 2.6. Simultaneously with the handover of the house, based on the handover record, each household signs a promissory note for purchasing housing on installment with the Social Policy Bank or the entrusted bank for lending and debt recovery (the entrusted bank) (model of the promissory note for borrowing money to purchase housing on installment attached as Appendix No. 1).

Clause 2.7. Documents for purchasing housing on installment include:

Handover record of the house;

Decision of the People's Committee approving the household's purchase of housing on installment (a copy);

Promissory note for borrowing money to purchase housing on installment.

Clause 2.8. Method of transferring the loan:

Based on the documents for purchasing housing on installment, the Social Policy Bank or the entrusted bank will directly transfer funds to the enterprise producing the house according to the actual price of the house but not exceeding seven million dong.

Quarterly, based on the approved annual plan, the central budget will transfer capital to the Social Policy Bank for loans equivalent to 50% of the total investment capital for constructing housing sold on installment to the public at zero interest rate (zero percent).

Clause 3. The Social Policy Bank implements policies for selling housing on installment to the public and receives subsidies from the State for the interest rate differential according to regulations, with a management fee of one percent per annum on the outstanding balance.

II. INCENTIVES FOR HOUSEHOLDS REPAYING DEBTS EARLY

Clause 1. The State implements incentive policies for households repaying debts early for housing purchased on installment.

Clause 2. The principle of encouraging early repayment is to reduce the amount payable corresponding to the interest rate differential and the subsidy provided by the State to the Social Policy Bank, calculated according to the following formula:

Example: Mr. Nguyen Van A (as head of the household) signed a promissory note to purchase housing on installment for seven million dong and repaid early.

Case 1: If repaid three years early:

Interest accrued over seven years = Seven million dong x 3% per annum x 7 years = One million four hundred seventy thousand dong.

Total amount payable without reduction = Seven million dong + One million four hundred seventy thousand dong = Eight million four hundred seventy thousand dong

The amount to be reduced = 4% : 12 months x 7 million x 36 months = 0.83 million dong.

The amount Mr. A has to pay: 8.47 million - 0.83 million = 7.64 million dong.

Case 2: If paid in advance for 7 years:

The interest generated in 3 years = 7 million dong x 3%/year x 3 years = 0.63 million dong

The amount to be paid for 3 years (before reduction) = 7 million dong + 0.63 million dong = 7.63 million dong

The amount to be reduced = 4% : 12 months x 7 million x 84 months = 1.94 million dong

The amount Mr. A has to pay: 7.63 million - 1.94 million = 5.69 million dong.

3. Based on the actual number of years that households repay their loans ahead of schedule, the People's Committee and the Social Policy Bank shall calculate the reduction in the principal amount payable for each household, and the households shall pay the difference between the amount of the loan taken out with deferred payment and the encouraged amount due to early repayment as mentioned above.

III.CASES WHERE HOUSEHOLDS ARE SUPPORTED FROM OTHER SOURCES OF FUNDS

1. Households that have been supported for housing according to planning from other sources of funds shall not be eligible to purchase housing under the deferred payment scheme as stipulated in this Joint Circular.

2. Households purchasing housing under the guidance of this Joint Circular, if they receive support from other sources of funds to build housing, the People's Committee and the Social Policy Bank shall coordinate with the supporting agencies to immediately recover the deferred payment amount as follows:

If the amount of support is less than the deferred payment amount for the house purchase, the recovery amount will be equal to the support amount, and the corresponding deferred payment amount will be reduced according to the contract signed.

If the support amount is greater than or equal to the total deferred payment amount (including principal and interest) for the house purchase, the recovery amount will be equal to the deferred payment amount, and the deferred payment contract with the household will be terminated.

IV.RESPONSIBILITIES AND LIMITATIONS OF RELATED AUTHORITIES

1. For local people's committees at all levels:

1.1. Provincial People's Committee:

To specifically define and publicly announce the criteria and eligible recipients for deferred payment housing purchases in each area, ensuring fairness and reasonableness. To direct the establishment and review of lists of eligible recipients for deferred payment housing purchases.

To manage and create conditions, directing orders to production enterprises for components and construction of housing for residents; to direct the implementation of housing construction, coordinating with the Social Policy Bank to implement loans for deferred payment housing purchases.

1.2. District and Commune People's Committees (as specified by the Provincial People's Committee) shall fulfill all tasks assigned by the Provincial People's Committee and follow the guidelines of this Joint Circular.

2. For households purchasing houses under deferred payment terms:

To make timely debt payments, and in cases of early repayment, to enjoy the encouragement policies as stipulated in this Joint Circular.

To use housing in accordance with the provisions of this Joint Circular.

3. For the Social Policy Bank:

To sign contracts and agreements, and to recover deferred payment amounts for house purchases from each household.

To make payments to enterprises producing houses as stipulated.

To separately account for and utilize funds transferred from the central budget and funds raised for deferred payment housing loans.

To report monthly on the status of deferred payment housing loans to the State Bank of Vietnam and the Ministry of Finance by the 15th day of the following month.

4. For enterprises producing components and constructing housing for residents:

Enterprises producing components and constructing housing for residents shall operate in the spirit of serving the people, ensuring reasonable prices without profit but not loss in production and construction.

Enterprises shall produce several models of houses for residents to choose from, suitable for their needs.

Part C. IMPLEMENTING PROVISIONS

This Circular shall take effect fifteen days from the date of publication in the Official Gazette. Any difficulties or obstacles encountered during implementation should be reported to the Ministry of Finance and the State Bank of Vietnam for consideration and appropriate amendments./.