GOV’T OKAYS PLAN TO ESTABLISH NATIONAL HOUSING DEVELOPMENT FUND

A social housing project in HCMC – PHOTO: LE VU

HCMC – The Government has given the nod to the establishment of a National Housing Development Fund to support the construction of social homes, worker accommodations, and affordable apartments for people who are under 35 years old.

Deputy Prime Minister Ho Duc Phoc chaired a meeting on April 21 to review the proposal, which was submitted by the Ministry of Construction and other relevant ministries, reported the Vietnam News Agency (VNA).

The proposed fund would be managed by the Ministry of Construction and financed through a mix of sources, including the state budget, voluntary contributions from domestic and foreign entities, revenues from the mandatory 20% land allocation for social housing development in commercial projects, and other legal sources.

The fund is intended to address persistent funding obstacles in the social housing sector. Although preferential loans and financial mechanisms currently exist, capital shortages remain a key bottleneck.

According to Deputy Minister of Finance Ho Sy Hung, the ministry is exploring suitable financial models, either through a dedicated fund or a housing finance institution, that ensure long-term sustainability. He recommended leveraging existing financial institutions instead of creating new ones, while urging both central and local governments to allocate additional resources to expand lending for social housing projects.

The Ministry of Construction is also considering the establishment of a state-owned enterprise dedicated to developing social housing.

The draft National Assembly resolution on piloting special mechanisms for social housing development includes provisions to establish the fund with three primary functions: supporting compensation and resettlement, investing in infrastructure, and offering financial assistance to businesses and eligible homebuyers.

The fund will operate as a state-run entity but remain separate from the state budget. It will have a two-tier structure: the central level overseen by the Ministry of Construction, and local branches managed by provincial authorities.

Deputy Minister of Construction Nguyen Van Sinh emphasized that social housing is a state responsibility, and the fund would serve as a tool to accelerate development in this sector.

State Bank of Vietnam Deputy Governor Dao Minh Tu noted that the current VND120-trillion credit package for social housing has underperformed due to policy bottlenecks rather than lack of funding. He called for a realistic assessment of market demand and funding constraints.

Deputy PM Phoc concluded the meeting by confirming the fund’s official name—the National Housing Development Fund—and instructed the Ministry of Construction to finalize the proposal and draft a Government decree for further review.

Source: The Saigon Times