From December 10, 2024, commercial banks will begin considering housing guarantees for developers for housing projects that are yet to be completed. To qualify for a guarantee for housing under construction, the following conditions must be met:
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On October 25, 2024, the State Bank of Vietnam issued Circular 49/2024/TT-NHNN, amending and supplementing several provisions of Circular 11/2022/TT-NHNN. This Circular introduces new regulations regarding the guarantee of future housing development projects.
To be considered for a guarantee from banks, developers must not only meet the requirements outlined in Article 11 of the Circular (except for cases involving counterpart guarantees) but must also receive a document from the provincial management authority confirming that the housing meets the conditions to be sold or leased. Specifically, developers must:
- Have full legal civil capacity and civil rights as prescribed by law;
- Ensure that the obligations to be guaranteed are legal financial obligations;
- Be assessed by credit institutions or foreign bank branches as capable of repaying the amount that the institution or branch must pay when fulfilling the guarantee obligation.
According to Clause 3, Article 1 of Circular 49/2024/TT-NHNN, in order to be granted a guarantee for future housing, developers must obtain a document from the provincial real estate management authority confirming that the housing meets the conditions for sale or lease-purchase. This replaces the previous requirement that the real estate meets the conditions for business as a future development.
(Meanwhile, Circular 11/2022/TT-NHNN stipulated that only commercial banks with sufficient capacity could provide guarantees for future housing developments if:
- The bank's establishment and operation license or amendments to that license include provisions for guarantee activities;
- The bank is not prohibited, restricted, suspended, or temporarily suspended from providing guarantees for future housing development.)
Additionally, Circular 49/2024/TT-NHNN changes the guarantee process. Specifically, when the developer or the counterpart guarantor requests a guarantee, the bank will review, assess, and decide to issue a guarantee, then sign an agreement with the developer. Based on this agreement, the bank will issue a commitment letter for the guarantee, which the developer will send to the buyer when signing the contract.
After the purchase or lease-purchase contract is signed, which includes the developer's financial obligations, the developer will send the contract to the bank to request the issuance of a guarantee letter for the buyer.
Furthermore, Circular 49/2024/TT-NHNN also abolishes several provisions in Article 34 of Circular 11/2022/TT-NHNN, such as the State Bank’s publication of a list of qualified commercial banks for issuing guarantees and the responsibility of the Department of Information Technology in managing technology-related risks.
Circular 49/2024/TT-NHNN will take effect from December 10, 2024.
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