It takes Nguyen Thi Bich Thuy nearly a month to complete all the necessary procedures to access the VND350 million loan under a governmental credit program which she needs to buy a house.

The biggest challenge, Thuy said, is to obtain the confirmation from local authorities that she does not own any land plots or other houses, which is one of the requirements for her to be eligible for the VND30 trillion (US$1.44 billion) loan.

Similarly, Nguyen Thi Diem Phuc, a nurse at Ho Chi Minh City-based Tu Du Hospital, said the most difficult step to access the loan is to have her status of income and house possession verified.

The city’s construction department asked Phuc to have her income verified by the health department, and her house possession verified by local authorities.

“But both the department and the authorities refused to give me the confirmation,” she lamented.

Even when she has managed to overcome these obstacles, another arose. It is not easy to find an apartment that meets all package requirements so that her loan will be disbursed, she said.

It has been nearly six months since the government-backed credit package to assist house-buyers was officially launched, but borrowers say they are not only challenged by banks to access the loans but also discouraged in their search for an apartment that meets all aid requirements.

The house-buying aid package worth VND30 trillion took effect as of June 1, allowing members of the public to borrow loans at only 6 percent a year to purchase apartments from social housing projects.

The credit package also helps house developers build new houses or convert their current commercial projects to social housing projects.

But as of the end of October, a report by the construction ministry revealed that only VND120 billion have been disbursed for seven house developers, and VND221 billion for 920 customers.

This means the total disbursement in nearly six months is only VND341 billion, or a modest 1.1 percent of the VND30 trillion package.

The ministry admitted that the disbursement pace is considerably slow compared to real demand and the current situation of the real-estate sector.

Myriad reasons

The Ministry of Construction attributed the poor disbursement to a number of reasons.

Only apartments in the commercial and social housing projects with an area of less than 70 square meters that fetch less than VND15 million per square meter are eligible for the credit aid. There are currently very few apartments that meet these requirements for customers to choose from.

Meanwhile, the regulatory agencies in the communes or wards may not fully acknowledge the new regulations, so they just slow down the process of seeking necessary confirmation and verification of the house-buyers, the ministry said.

And yet, banks should also be held responsible. Some credit institutions appear to be too cautious in verifying their customers’ financial status, which delays the disbursement process.