Approving national housing finance Policy Orientations up to 2020
THE PRIME MINISTER
Pursuant to the December 25, 2001 Law on Organization of the Government;
Pursuant to the December 12, 1997 Law on the State Bank of Vietnam and the June 17, 2003 Law Amending and Supplementing a Number of Articles of the Law on the State Bank of Vietnam;
Pursuant to Loan Agreement No. 1990-VIE (SF) signed on July 31, 2003, between the Socialist Republic of Vietnam and the Asian Development Bank (ADB);
At the proposal of the State Bank Governor in Report No. 28/TTr-NHNN of March 30, 2007,
Article 1.- To approve national housing finance policy orientations up to 2020 with the following principal contents:
To strive to establish a healthy, efficient and sustainable housing finance system, contributing to boosting national socio-economic development; to create jobs, increase incomes and improve the quality of people's life, especially by increasing the people's house ownership rate. To achieve these objectives, it is necessary to build a system of consistent mechanisms, policies and legal institutions, create a favorable, attractive and open environment for organizations and individuals to take part in building and developing the national housing finance system.
National housing finance policy orientations up to 2020 have been formulated in line with the Vietnamese Party's and State's strategic viewpoints and policies on socio-economic development up to 2010 and development orientations to 2020, specifically:
1. Adhering to the principles of relying on internal resources and attaching importance to external resources (internal resources are decisive while external resources are important); liberating, exploiting and promoting internal resources and, at the same time, turning external resources into internal resources, making external resources contribute to increasing internal resources;
2. Focusing on developing housing finance relations suitable to the market mechanism. In the initial stage of housing finance development, the State plays a decisive role in strengthening and developing a primary house-mortgage market, forming and developing a secondary house-mortgage market. National housing finance policy orientations will cover solutions enabling social policy beneficiaries to access capital sources reserved for housing;
3. Exploiting and mobilizing to the utmost financial resources for housing, especially medium- and long-term financial sources, efficiently distributing and using these resources, contributing to increasing the people's house ownership rate;
4. Serving as a basis for building a legal framework for the State to manage housing finance by law;
5. Combining important economic policies such as capital raising policy, policy to enhance the institutional capacity of participating financial institutions, public financial policy, construction policy and land policy; conforming to the housing development strategic viewpoints adopted by the Prime Minister in Decision No. 76/2004/QD-TTg of May 6, 2004, approving housing development orientations up to 2020.
To formulate mechanisms and policies and improve legal documents aiming to encourage, promote and manage the development and operation of the housing finance system, specifically:
1. To develop mechanisms to raise capital, especially medium- and long-term capital, for the housing domain:
a/ To encourage individuals and households to deposit savings at commercial banks and credit institutions in order to purchase and renovate houses through a mechanism of housing-savings contracts within the system of banks and credit institutions; to introduce tax incentives, partial interest-rate supports or savings bonuses to involve individuals, households, banks and credit institutions in this mechanism.
b/ To establish an agency in charge of re-lending house mortgage capital as a tool for the Government to regulate and promote the development of the housing finance system in Vietnam. Initially, this agency shall operate under an appropriate mechanism, raise and use capital sources such as ODA loans, issue government-guaranteed bonds and raise other lawful capital sources for re-lending capital, re-purchase eligible housing loans from financial institutions of the primary mortgage market, helping these institutions expand loans in the housing domain and promoting the development of the primary mortgage market. When the primary mortgage market and capital market fully satisfy necessary conditions in terms of scale and legal bases, the agency in charge of re-lending house mortgage capital shall issue securities based on house mortgage loans - i.e., turning house mortgage loans into securities, operating as a medium- and long-term capital channel between the capital market and the mortgage market.
c/ The State adopts a special mechanism to mobilize housing capital for social policy beneficiaries, firstly by establishing housing development funds in localities in the spirit of Decision No. 76/2004/QD-TTg of May 6, 2004, approving housing development orientations up to 2020; assists some localities, including Hanoi, Ho Chi Minh City, Hai Phong city, Binh Duong and Dong Nai, in implementing on a pilot basis the housing development scheme for low-income earners in urban areas and industrial parks.
2. To enhance the institutional capacity of mortgage loan-providing financial institutions
a/ To build a fast, efficient, safe and easily accessible system for mortgage loan provision; to ensure the control and recovery of debts of mortgage loans; to systemize real estate mortgage activities within the system of credit institutions; to standardize tools and processes of real estate mortgage loan provision;
b/ To encourage financial institutions to enhance their financial and management capacity and competitiveness in the provision of real estate loans;
c/ To study and promulgate a system of criteria for evaluation of housing loans for unified application to all financial institutions;
d/ To study and establish regulations on compulsory insurance for mortgage assets; to formulate policies on mortgage loan provision insurance and guarantee;
e/ To encourage the application of information technology to real-estate mortgage loan provision within the system of banks and credit institutions;
f/ To encourage financial institutions to develop housing finance products which are multiform, diversified and responsive to market demands.
3. Support policies:
To implement public finance policies directly or indirectly supporting or encouraging organizations and individuals to participate in developing the housing finance system, specifically:
a/ Supporting market development:
- To formulate mechanisms and policies for granting partial interest-rate supports or savings bonuses to institutions and individuals taking part in housing-savings contract programs;
- The Government adopts mechanisms and policies to allocate capital as initial supports for the establishment and operation of an agency in charge of re-lending house mortgage capital, serving as a motive force for promoting the development of the primary mortgage market and the formation and operation of the secondary mortgage market.
b/ Supporting social policy beneficiaries:
- To formulate policies to support and encourage investment in projects on construction of social houses by offering tax incentives or infrastructure construction supports;
- To assist social policy beneficiaries in accessing and paying housing finance sources through support policies and mechanisms in terms of credit, interest rate, insurance or guarantee for house mortgage loans for these beneficiaries.
4. To improve a legal framework for housing finance:
a/ To improve legal provisions on land- or house-related rights; civil or security transactions; registration of real estates or security transactions; real estate valuation, auction and business;
b/ To establish a land-related information system which is adequate, regularly updated with land changes, transparent, clear, accurate and easily accessible for concerned organizations and individuals;
c/ To improve the system of valuating assets, including real estates (land and assets affixed to land) for use as a basis for valuating houses or real estates and supplying information to individuals, credit institutions and investors;
d/ To make consistent legal provisions on proving the rights to use land or own houses and other real estates to meet administrative reform requirements and create conditions for all individuals and organizations to carry out real estate registration procedures (one-stop shop, one seal, one paper and one procedure).
IV. ORGANIZATION OF IMPLEMENTATION
1. To assign the State Bank of Vietnam:
a/ To act as a major body in coordinating with relevant ministries and agencies in implementing national housing finance policy orientations up to 2020; to monitor and regularly report the implementation situation and results to the Prime Minister;
b/ To assume the prime responsibility for, and coordinate with relevant ministries and branches in, studying and formulating (in 2007) housing-savings programs in order to generate capital sources for the housing domain, suitable to Vietnam's current practical conditions;
c/ To study, formulate and promulgate (in 2007) a system of criteria for evaluating housing loans for unified application nationwide;
d/ To further speed up the process of reforming the banking industry and modernizing the banking information system in line with the scheme on development of Vietnam's banking industry up to 2010 and orientations to 2020 already approved by the Prime Minister;
e/ To take measures to encourage commercial banks to diversify housing financial products, raise their organizational capacity and apply advanced and modern technologies and managerial methods to the provision of housing loans;
f/ To study and formulate a scheme on the establishment of an agency in charge of re-lending house mortgage capital with an appropriate model and operation mechanism to promote the development of the housing finance system according to the set objectives.
2. To assign the Ministry of Finance:
a/ To improve the asset valuation system; to promulgate (before 2008) documents and regulations on asset valuation criteria and mechanisms;
b/ To study and propose the promulgation of a mechanism of mortgage asset insurance, and mortgage loan insurance and guarantee suitable to national economic development conditions in order to encourage financial institutions to increase housing loans;
c/ To assume the prime responsibility for, and coordinate with relevant ministries and branches in, studying, formulating and submitting to competent authorities for promulgation (in 2007) incentive and support policies for the construction of houses, especially houses for low-income earners;
d/ To further build and develop the capital market, especially the bond market, in order to facilitate the issuance of mortgage bonds (bonds guaranteed with house mortgage loans) when appropriate.
3. To assign the Ministry of Natural Resources and Environment:
a/ To study and propose the improvement of regulations on land users' rights; to provide for simple and easily applicable order and procedures for the exercise of land users' rights;
b/ To further direct the completion of cadastral cartography, grant of land use right certificates and timely record of land-related changes in cadastral dossiers;
c/ To direct the establishment and operation of a computerized land-related information system which is adequate, public, transparent and easily accessible.
4. To assign the Ministry of Construction:
a/ To guide the grant of house ownership certificates (in 2007) under the provisions of the Government's Decree No. 90/2006/ND-CP of September 6, 2006, detailing and guiding the implementation of the Housing Law;
b/ To guide (before 2008) methods of determining house construction prices for use as a basis for valuation of houses upon the provision of house mortgage loans;
c/ To assume the prime responsibility for directing localities to work out five-year social-housing development programs and annual social-housing development plans, incorporate them into the national social-housing development program to be submitted to the Prime Minister for approval;
d/ To direct the implementation of housing development orientations up to 2020 and the social housing scheme.
5. To assign the Ministry of Justice:
a/ To further study and finalize the Bill on Real Estate Registration for the Government to consider and submit it to the National Assembly, in the direction of building a centralized and unified registration system with simple procedures to meet the management requirements, thus creating favorable conditions for organizations and individuals in getting their real estate rights and transactions certified;
b/ To review and propose amendments to housing finance-related legal documents in accordance with international standards and Vietnam's practical conditions, ensuring equality, transparency and interests of involved parties.
6. To assign the Ministry of Planning and Investment:
a/ To coordinate with relevant ministries and branches in studying policies to attract foreign investment in the development of Vietnam's housing finance market;
b/ To include housing finance-related schemes in the list of ODA-calling projects;
c/ To include housing finance development contents in socio-economic development plans, starting from 2008.
7. To assign provincial/municipal People's Committees:
a/ To supervise and manage housing development capital sources in their localities for efficient and equal use through establishing appropriate mechanisms, combining capital sources of the State, enterprises and individuals for local housing development;
b/ To speed up the process of granting land use right certificates, strive to complete the grant of land use right certificates in urban centers in 2007.
Article 2.- This Decision takes effect 15 days after its publication in "CONG BAO."
Article 3.- The Governor of the State Bank of Vietnam, ministers, heads of ministerial-level agencies, heads of government-attached agencies, and presidents of provincial/municipal People's Committees shall implement this Decision.
Nguyen Tan Dung