Thông tư 18/2009/TT-NHNN

CIRCULAR

PROVIDING IN DETAILS FOR LENDING BY COMMERCIAL BANKS TO BORROWERS FOR PURCHASE, HIRE PURCHASE OF LOW END HOUSING AT URBAN AREAS

- Pursuant to the Resolution No. 18/ND-CP dated 20 April 2009 of Government on some mechanisms, policies in order to speed up housing development for pupils, students at training establishments and housing for employers working at centralized industrial zones, persons with low income at urban areas,
- Pursuant to the Decision No. 67/2009/QD-TTg dated 24 April 2009 of Prime Minister on the issuance of several mechanisms, policies on housing development for persons with low income at urban areas.
The State Bank of Vietnam hereby provides in details for lending by commercial banks to borrowers for purchase, hire purchase of housing at urban areas as follows:

Chapter I.

GENERAL PROVISIONS

Article 1. Governing laws

Commercial banks lending to persons entitled to buy, hire purchase low end housing at urban areas shall comply with provisions of applicable laws on lending by credit institutions in respect of customers, provisions of this Circular and other provisions of related laws.

Article 2. Interpretation

In this Circular following terms shall be construed as follows:

1. Lending to persons who buy, hire purchase low end housing at urban area (hereinafter referred to as lending to persons who buy, hire purchase low end housing): means commercial banks provide loans to borrowers with low income at urban areas, who are qualified for purchase, hire purchase of low end housing according to the state’s policy.

2. Purchase of low-end housing by installment payments means person with low income is entitled to buy low-end housing and make payment by various installments.

3. Hire purchase of low end housing: means persons with low income are entitled to hire purchase low end housing according to policy and hire purchaser shall become owner of the entire house after making full payment of hire purchase amount under the contract of hire purchase.

Article 3. Governing scope and subjects of application

1. Commercial banks established and operating under the Law on Credit Institutions shall be entitled to provide loans for purchase with one-off payment, installment payment, hire purchase of house, to subjects entitled to buy, hire purchase low end housing in accordance with State policy

2. Persons who borrow capital from commercial banks to buy, hire purchase low end housing include officers, civil servants, armed forces who enjoy salary from state budget and low income people at urban areas.

Article 4. Principles of lending for purchase, hire purchase of low end housing

1. Apart from provisions stated in this Circular, commercial banks which provide loans for purchase, hire purchase of low end housing shall comply with commercial credit mechanism.

2. Giving loan interest rate support to subjects which buy, hire purchase low end housing shall be carried out in accordance with instructions of Ministry of Finance.

3. Commercial banks and borrowers shall mutually agree about loan term on the basis of their income and ability of debt payment.

4. Loans to borrowers to buy, hire purchase low end housing must ensure to be provided to the right subject, for the right purpose, ensure the ability to collect both principals and interests upon maturity.

Chapter II.

SPECIFIC PROVISIONS

Article 5. Conditions for borrowing to buy house with one-off payment, buy house with installment payment and hire purchase low end housing

Subjects as stipulated in Paragraph 2, Article 3 of this Circular, borrowing capital to buy, hire purchase low end housing must fully satisfy following conditions:

1. Having civil legal capacity and civil act capacity

2. Being qualified to buy, hire purchase low end housing in accordance with provisions in Paragraph 2, Article 6 of the Decision No. 67/2009/QD-TTg dated 24 April 2009 of Prime Minister and provisions of People’s Committee in provinces, cities under the central Government’s management; being agreed upon by investor to purchase, hire purchase low end housing.

3. Their minimum own capital for purchase, hire purchase of low end housing is

a. Equal to 30% of value of low end housing according to agreement with investor of low end housing project if customer borrows capital to buy low end housing with one off payment;

b. Equal to 20% of value of low end housing according to agreement with investor of low end housing project if customer borrows capital to buy low end housing with installment payment, hire purchase low end housing;

4. Their financial capacity, plan of debt repayment are correspondent with the time of debt repayment to the bank as committed

Article 6. Documents, procedures, process of appraising, approving loans to customers who borrow for purchase, hire purchase of low end housing

Pursuant to provisions in this Circular and general provisions on lending by credit institutions to borrowers, commercial banks shall provide specific guidance on documents, procedures, process of appraising, approving loans to customers who borrow for purchase, hire purchase of low end housing for consistent performance in the system of commercial banks.

Article 7. Amount of lending and term of lending for buying, hire purchasing low end dwelling house

1. Lending for buying low end housing with one-off payment

a. The amount of loan shall be agreed upon by and between the commercial bank and borrower, but it shall not exceed 70% of value of low end housing in accordance with agreement made with the investor of low end housing project.

b. Loan term shall be agreed upon by and between commercial bank and borrower, but not be lower than 5 years at the minimum. Where the borrower makes financial arrangement to pay debt prior to its maturity to the commercial bank, then commercial bank shall not be entitled to collect fee for pre-mature debt repayment of the borrower.

2. Lending for buying low end housing with installment payment, lending for hire-purchase of low end housing

a. Commercial bank and the borrower shall agree about loan limit, provided that it does not exceed 80%, at the maximum, of value of low end housing by installment payment or hire purchase according to the agreement made with the investor of low end housing project. Commercial bank shall only be entitled to calculate interest for actually arisen outstanding loan of the borrower, not be authorized to collect fee for granting credit line to the borrower.

b. On the basis of approved credit lines, commercial bank shall agree upon with the borrower about plan and amount of each disbursement in correspondence with the term and amount of installment payment or amount of hire-purchase payable by the borrower to the investor;

c. Based on the plan and amount of disbursement and financial plan of the borrower, commercial bank shall agree upon with the borrower about term, plan and amount of debt payment for each term by the borrower, but the minimum term of debt payment is 10 years.

Article 8. Interest rate applicable to loan for purchase, hire-purchase of low end housing

1. Loan interest rate applicable to subjects of purchase, hire purchase of low end housing shall comply with the commercial credit mechanism in accordance with provisions of applicable laws.

2. Amount of interest rate support for borrowers, who buy, hire purchase low end housing, of the State shall be transferred to commercial banks to directly discount for the borrowers in periods of interest calculation and collection.

Article 9. Security assets for loan to buy, hire purchase low end housing

1. Based on actual situation of borrowers, commercial bank may select methods of loan security in line with provisions of current laws.

2. Where borrowers completely make full payment to investor and are granted Certificate of housing ownership, commercial banks shall be entitled to, after 10 years since the date of signing contract between borrowers and the investor, require the borrowers to supplement the house bought, hire- purchased by the bank loan as collaterals to the commercial banks.

Chapter III.

IMPLEMENTATION ORGANIZATION

Article 10. Responsibilities of commercial banks which provide loans for purchase, hire purchase of low end housing

1. To issue guiding document for contents related to specific features of lending activity for purchase, hire purchase and mechanism of interest rate support for customers who purchase, hire purchase low end housing for applying in the system of commercial bank.

2. To perform the lending for purchase, hire purchase of low-end housing in accordance with provisions in this Circular and other related documents.

3. To carry out the deduction of loan interest from support source of the State in accordance with guideline of the Ministry of Finance.

4. To carry out pre, during and after lending inspection to ensure the loan is provided for the right purpose and to the right borrower.

Article 11. Responsibilities of customers who borrow loan for purchase, hire purchase of low end housing

1. To fully provide information, materials related to application for loan to purchase, hire purchase low end housing upon request of commercial bank; to take responsibilities to the law for the accuracy of information, materials provided to the commercial bank.

2. To correctly comply with commitment made in the credit contract with the commercial bank

Article 12. Responsibilities of units of the State Bank

1. Credit Department: to coordinate with units of the State Bank in dealing with issues related to lending for purchase, hire purchase of low- end housing

2. Banking inspection, supervision agency: To carry out inspection, supervision over the lending for purchase, hire purchase of low end housing by commercial banks to borrowers.

3. State Bank branches in provinces, cities under the central Government’s management: To carry out the inspection, supervision, within their competence, over situation of lending for purchase, hire purchase of low end housing. To make report, suggestion to Governor of the State Bank and Chairman of People’s Committee in provinces, cities under the central Government’s management for dealing with arising issues related to the lending for purchase, hire purchase of low end housing in the local area.

Article 13. Regime on information, reporting

Commercial banks shall be responsible for summarizing and making periodical report (quarterly) on status of lending for purchase, hire purchase of low end housing in accordance with the form attached to this Circular. Quarterly report shall be submitted to the State Bank (Credit Department) prior to the first 15 days of the following quarter.

Article 15. Implementing effectiveness

1. This Circular shall be effective after 45 days since the date of signing.

2. Director of Administrative Department, Director of Credit Department and Heads of units of the State Bank of Vietnam, General Managers of State Bank branches in provinces, cities under the central Government’s management; Chairman of Board of Directors and General Managers (Mangers) of commercial banks; subjects that borrow to purchase, hire purchase low end housing shall be responsible for the implementation of this Circular.

Bank

GENERAL REPORT ON LENDING TO BORROWERS FOR PURCHASE, HIRE PURCHASE OF LOW END HOUSING

Quarter….Year

(Lending according to the Circular No. 18/2009/TT-NHNN dated 14 August 2009 of SBV)

Unit: Million dong