Ho Chi Minh City proposes increasing interest subsidies for social housing
Ho-Chi-Minh-Stadt is overhauling its financial framework to channel 16.8 trillion VND into social housing between 2026 and 2030, aiming to build 199,400 units.
City Increases Interest Subsidies for Social Housing Projects
Under a newly drafted decree designed to flesh out urban development regulations, the capital ceiling eligible for state-budget interest subsidies will jump from 200 billion VND to 300 billion VND per project. This expansion covers social housing initiatives, worker accommodations, and student dormitories.
Authorities are also stretching the maximum support window from seven years to a full decade, starting from the initial disbursement date through the Ho-Chi-Minh City Investment and Trade Promotion Centre (HFIC). Rather than directly financing developers, the municipal budget will absorb a portion of the interest expenses on loans issued by HFIC. Projects must pass rigorous HFIC economic viability and repayment capacity assessments before securing these subsidized loans or entering consortium financing arrangements.
Le Huu Nghia, director of Le Thanh Construction and Trading Company Limited, noted that social housing remains the most difficult sector to finance within the broader real estate market. High deposit rates make long-term lending at preferential rates around six percent annually commercially unviable for traditional commercial banks. Meanwhile, standard commercial loan applications from developers face rejection due to lender apprehension regarding legal risk. Nghia described the increased 300 billion VND limit and ten-year term as a crucial catalyst for rebuilding developer confidence.
Municipal Budget Allocates 16.8 Trillion VND Through Syndicated Credit
To distribute the capital effectively, the draft framework introduces a formal syndicated credit mechanism. The Ho-Chi-Minh-Stadt People’s Council will allocate public investment funds from the municipal budget to subsidize borrowing costs for priority sectors, operating through local development funds or commercial bank syndicates led by HFIC.
Outlays are scheduled to ramp up significantly over the decade. The city plans to disburse 2.5 trillion VND in 2026, 3 trillion VND in 2027, 3.5 trillion VND in 2028, 3.8 trillion VND in 2029, and 4 trillion VND in 2030, totaling 16.8 trillion VND by the end of the decade.
These targets contrast sharply with current execution rates. Data from the State Bank of Vietnam Region II indicates that under Government Resolution 33/NQ-CP, total credit for social housing, worker housing, and old building reconstruction reached 145 trillion VND during the first half of 2026. Yet within Ho-Chi-Minh-Stadt, only six projects totaling over 2,200 billion VND have received approval for lending under this umbrella. Five of those projects have drawn down nearly 616 billion VND in cumulative revenue, while individual retail borrowers have accessed 173 loans totaling nearly 112 billion VND.
Production Targets for 2026 and Beyond
Huynh Thanh Khiet, deputy director of the Ho-Chi-Minh-Stadt Department of Construction, outlined an ambitious delivery schedule that requires completing 181,257 units between 2026 and 2030—ten times the output of the 2021–2025 cycle. For 2026 alone, municipal authorities expect developers to finish 28,500 social apartments.
City officials have committed to intensifying case-by-case administrative processing for the remainder of the year. Responsibilities are being assigned strictly across departments, districts, and investor groups to ensure the 2026 milestones are met and sufficient funding pipelines are established for 2027.