While the effective date of the government’s house-buying aid program is only two days away, most borrowers still do not know how to apply for the cheap loans, while many banks have yet to initiate any programs to offer the preferential credits.

The house-buying aid package worth VND30 trillion (US$1.44 billion) will take 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 State Bank of Vietnam has assigned five banks to offer the preferential loans, namely Agribank, BIDV, Vietinbank, Vietcombank, and the Mekong Housing Bank.

But both borrowers and realty companies currently have little information about the credit package, while the lenders refuse to provide any loan application guidance.

“The package will become applicable in two days, but I still do not know whom I have to contact, or where I should ask to borrow a loan,” said Huynh Sang, a civil servant in Ho Chi Minh City.

Sang has contacted several banks to no avail, he added.

A Tuoi Tre correspondent disguised as a potential house buyer contacted the Phan Dinh Phung transaction office of Agribank in Phu Nhuan District, and was told there is no guidance from headquarters yet.

”A number of customers have come to ask about the credit package because the 6 percent interest rate is at least 8 percentage points lower than the normal rates applied on property purchase,” a credit official said.

The Gia Dinh branch of BIDV also said they have yet to receive any direction from headquarters.

Strict requirements

Several credit officials at Vietinbank, meanwhile, said they have received guidance.

“But it is mostly based on Circular No.7 of the Ministry of Construction, so there are many unclear points,” they admitted.

Under Vietinbank requirements, eligible borrowers of the cheap loans are people who are paid from the state budget and work at public institutions.

“Typical examples are local government officials or public school teachers, while those not falling in these categories should be low-income earners to be eligible for the loans,” an official said.

“But there is no specific guidance on how to be counted as a low-income earner,” he added.

Another requirement is that the borrowers should have as many debt repayment solutions as possible, according to the banker.

“The more sources of income the borrowers have, the better chance they have to access the loans,” he said.

Van, a Phu Nhuan resident, said she has carefully studied the requirements to borrow from the aid package and found some unreasonable points.

“Banks require that borrowers have a house buying contract before applying for the loan, while the process should be reversed,” she said.

“Normally, people will only begin to sign the contract when they have already obtained the loan approval; how could they manage to clear the contract when banks reject their loan application?” she elaborated.

Meanwhile, BIDV CEO Phan Duc Tu said customers can visit branches for consultation on the procedures and conditions to access the loans as of today, May 30.

“BIDV is committed to offering the preferential loans as of June 1, as required,” he promised.

“Borrowers who meet all conditions will see the money disbursed within four days,” he added.

BIDV will earmark VND10 trillion for the program, he said.

“House buyers can borrow loans worth up to 80 percent of the apartment’s value for a maximum term of 15 years,” he added.