HOUSING LOAN WITH DEFERRED PAYMENT

HOUSING LOAN PROGRAM IN FLOODED AREAS

1. General provisions:

* Implementation scope:

- VBSP’s branches in provinces in flood prone areas of the Mekong River Delta including: Long An, Tien Giang, Vinh Long, Can Tho, Hau Giang, An Giang, Dong Thap and Kien Giang.

* Target clients:

- Households living in unsafe areas, when a flood come these households have to move backward to existing population quarters, including: 

+ Households having permanent residence at the areas.

+ Immigration households having legal residence at the areas.

+ Households living in areas which are vunerable to landslide in flood.

- Enterprises building deffered payment houses for households.

* Loan Principles:

- Using the loan properly as stated in loan purpose.

- Having obligations to repay (principal and interest) fully on time.

2. Specific provisions:

For borrowers: Lending of VBSP to households is conducted in 2 choices: loans for households to buy deffered payment houses builded by enterprises, or loans for households to build houses on their own.  

* Lending conditions:

Households taking loans for buying deferred payment houses: 

+ Loan amount up to VND 7,000,000:

Having a decision of house-base receipt signed by People’s Committee (either at commune or district level upon decision of Provincal People’s Committee); having name in a list of households buying deffered payment houses approved by PPC or DCP under authorization of PPC; having house receipts.

+ Loan amount up to VND 9,000,000

In addition to requirements mentioned above, households need to meet other conditions as follow: being poor and disadvantaged, thus, have no capacity to finish houses; moving to existing population quarters from 11/9/2005 and later; being listed in the list of households who are eligible for an increase in maximum loan amount approved by PPC or DCP under authorization of PPC.

+ Additional loan amount upto VND 2,000,000 to existing loans.

Poor and disadvantaged households who have no capacity to finish houses; moved to existing population quarters from 11/9/2005 and later, and have received a maximum loan of VND 7,000,000, now have demand for an additional loan amount of VND 2,000,000 at maximum for housing purposes ; and being listed in the list of households who are eligible for an increase in maximum loan amount approved by PPC or DCP under authorization of PPC.

Households taking loans for building houses their own: 

- Loan amount up to VND 7,000,000:

+ Having a decision of house-base receipt signed by People’s Committee (either at commune or district level upon decision of Provincal People’s Committee);

+ Having name in a list of households being eligible for taking loans for building houses approved by PPC or DCP under authorization of PPC;

+ A completed house built in accordance to regulations stipulated by PPC.

- Loan amount up to VND 9,000,000

In addition to requirements mentioned above, households need to meet other conditions as follow:

+ Moved to existing population quarters from 11/9/2005 and later;

+ Being listed in the list of households who are eligible for an increase in maximum loan amount approved by PPC or DCP under authorization of PPC.

* Loan size:

- A household who is target client and satisfy all requirements is eligible to take a loan to buy 01 house built by a construction enterprise or to build 1 house. The loan amount depends on real value of a completed house announced by PPC but should not exceed VND 7,000,000. In case the real value is higher than VND 7,000,000, the gap should be covered by households their own.

- An extremely disadvantaged and poor household who is incapable of finishing the house shall take a maximum loan of VND 9,000,000.

* Loan duration and repayment:

-  Maximum loan duration is 10 years with a grace period of the first 5 years. In case of additional loan amount, repayment due date of such additional amount repayment should not be later than the last due date in the signed derferred payment housing loan contract.

- During the grace period (first 5 years), households are not obligated to make repayment of principal and accrued interest of such period.

- Households are obligated to pay principal and interest since the sixth year. Annual minimum repayment amount should be 20% of the total principal and interest.

* Lending interest rates:

- Interest rate is 3%/year 

Construction enterprises:

* Borrowing conditions:

- Having a contract signed between the enterprise and a unit/agency who is authorized by PPC to manage the construction of population quarters and houses (People’s Committee or a Project Management Unit).

- Being listed in the list of housing construction enterprises approved by PPC and satisfy stipulated regulations on quality, standards of houses ( 32m² 

force corresponding concrete framework, brick walls, corrugated iron roof and septic tanks) which is certified by the project inspection unit.

* Loan utilization:

- Enterprises using loans to cover construction costs as houses have been completed but not yet transferred to household.

* Loan size:

- Depending on real value of a completed house but should not exceed VND 7,000,000/a house. Extremely disadvantaged and poor households who are incapable of finishing the houses, and assign the task of finishing houses to the construction enterprises,  shall take a maximum loan of VND 9,000,000/a house.

- Depending on construction cost of 1 house stipulated in the contract signed between the enterprise and a unit/agency who is authorized by PPC to manage the construction of population quarters and houses (People’s Committee or a Project Management Unit).

- Total loan amount is calculated basing on loan amount for 1 house and total number of completed houses as certified in minutes of inspection.

* Loan duration:

- VBSP and enterprises make agreements on loan duration in compliance with house transfering plan to households but not exceed 6 months from the day of loan receipt.

* Lending interest rates:

- 6,6%/year

- Over due rate is 130% of the lending rate.