The Ho Chi Minh City People's Committee has directed district, commune and ward administrations to simplify procedures for home buyers in their respective localities.

The directive comes following residents' complaint about cumbersome procedures that are preventing them from accessing preferential loans designed to help low-income people buy their own homes, thereby enabling a real estate market revival.

To apply for an apartment under low-income housing projects, the applicant needs a housing-status paper certified by authorities in her/his locality.

However, many district and commune officials in Ho Chi Minh City and other localities have refused to provide the certificates to prospective home-buyers, saying they are not aware if the applicant has any other housing property in other localities.

This has become a major hindrance in the disbursement of loans from the 30 trillion VND (1.42 billion USD) package announced by the Government.

Nguyen Hoang Minh, deputy director of the State Bank of Vietnam's HCM City branch, said that as of September 2013, just 137 individual clients had signed contracts for loans of 78.46 billion VND. Of this, 22.6 billion VND has been disbursed to 58 applicants, he said.

No business has signed a contract for loans from the 30 trillion VND package, Minh added.

Many applicants are unable to access loans from the package because they do not have assets to mortgage, local reports have said.

Although commercial banks have agreed to accept houses built under the VND30 trillion package as mortgage, notary public offices are not notarising the relevant papers.

Commercial banks also want applicants to show their capacity to repay their loans, but for most prospective buyers, the short 10-year term offered for the loans would exert considerable strain on limited financial resources.-VNA