The second phase of a national housing programme for the poor will benefit around 500,000 families who will receive partial funding, but Government agencies differ on how it is to be financed.

According to a draft proposal submitted to the Prime Minister by the Ministry of Construction, funding of around 5 trillion VND (236.9 million USD) will be drawn from the State budget for the second phase (2013-15) of the housing programme.

Recipients of this funding can augment their housing capital with low-interest loans from the Bank of Social Welfare and other sources, the proposal says.

The beneficiary households, divided into three categories based on the extent of their poverty, will each receive 10 million VND (474 USD), 12 million VND (568 USD) or 14 million VND (663 USD).

Families who have already received housing support but are living in houses that are in very bad conditions can get 50 percent of the above-mentioned support.

However, the Ministry of Finance has said that while the programme is necessary, it should not use State Budget funding, given current constraints.

Meanwhile, the Ministry of Planning and Investment has asked the Ministry of Construction to request the Government for an extension for the programme so that its financing can be arranged.

According to the planning ministry, instead of using State Budget funds, the programme should support the poor to build houses by offering low-interest loans from the Bank of Social Welfare, which is partially funded by the Government.

The beneficiary households can also raise funds from local budgets and other sources like local businesses, it said.

However, the Ministry of Construction has pointed out that localities with a high number of poor households cannot spare funds for the programme.

Mobilising capital from businesses is also impractical as they are caught in the ongoing economic slump.
It has asked the Government to continue implementing the programme as per its proposal.

Under the programme, the minimum area of a house would be 24 square metres for households with two or more people; and 18 square metres for individuals. The houses should have a minimum life expectancy of 10 years.

Families eligible to benefit from programme must be poor under current laws, have no house, or have houses in extremely poor conditions or at high risk of collapse. In order to access funding from the programme, the families must also have no financial ability to repair their houses on their own.

Families who have benefited from earlier housing support policies will also be eligible provided at least eight years have passed before the new programme was initiated in 2011, and if their houses are in extremely poor condition.

In addition to the support from the State budget, the households can also get loans of up to 15 million VND (710 USD) at three percent per year for 10 years, with a possible extension of another five years. Each year, at least 20 percent of the loan principal has to be repaid.-VNA