A draft plan on setting up a housing development and saving fund has been recently submitted by the Ministry of Construction to the Government, with an ambitious objective of helping low- and middle-income earners become home owners.
The draft plan offers two options on the operational model of such fund. But both options share the viewpoint that the fund is a not-for-profit institution operating on the principle of voluntariness.
The first model would focus on low-income people in need of a home and businesses in search for capital for low-cost housing projects. Operational capital for the fund would come from a wide range of funding sources, including 30% of national construction lottery profits, 10% of land use levy amounts collected from commercial housing projects and central and local budget allocations.
Those seeking for housing support may join the fund after they make a down payment equal to at least 30% of the value of the house or apartment they intend to buy. Fund members would also be required to make monthly contributions to the fund at least five years before getting a loan. Their contribution rates would be proportional to the value of their projected loans, and their contributed amounts would enjoy an interest rate half of that on commercial loans.
Meanwhile, the second model would target middle-income people who want to buy commercial houses. The fund would be financed by fund members who would receive loans when their accumulated contributions to the fund mount to half of the value of the to-be-bought property.
“This plan looks specific and viable but the journey from idea to action would be long,” said Nguyen Van Duc, vice chairman of the Ho Chi Minh City Real Estate Association.
The two models of housing saving fund are expected to be piloted in