Partial Mortgage...
Under current regulations on secured transactions, banks are now permitted to accept a partial mortgage over a real estate project under development, instead of taking the entire project as collateral as previously required. This marks a significant improvement in the legal framework governing secured assets, facilitating credit operations for financial institutions while substantially reducing legal and financial risks for the mortgagee. In practice, accepting a mortgage over an entire real estate project has always carried considerable risks, as the project’s progress can be affected by numerous objective and subjective factors such as market fluctuations, construction permit delays, planning adjustments, or force majeure events like natural disasters or pandemics. When a project is delayed or suspended, the overall collateral value may sharply decline, making debt recovery difficult or untimely for the bank.

By contrast, accepting a mortgage over only a portion of the project — for example, a specific building, block, or functional area that has been clearly approved in the project’s legal documentation — allows banks to better manage risks, accurately assess collateral value, and respond more flexibly if problems arise. The new regulation also requires that the partial mortgage be properly registered with the competent authority, accompanied by approved drawings, detailed decisions identifying the mortgaged section, and the developer’s commitment to separate the rights and obligations between the mortgaged and non-mortgaged portions.

From a legal perspective, this represents a progressive approach to risk management in the banking and real estate sectors. It enhances the safety of lending activities while promoting a more transparent and sustainable capital market. By allowing projects to be partially mortgaged, capital flows can circulate more efficiently, enabling investors and developers to access financing suitable for each development stage, while banks maintain necessary control over credit risks. This balanced mechanism protects lenders’ interests, ensures project feasibility, and contributes to the stable and responsible growth of Vietnam’s real estate market.