Purpose This study aimed to estimate the prevalence of serious psychological distress (SPD) among slum dwellers and homeless individuals in Ho Chi Minh City, Vietnam, and to identify factors associated with SPD. Method A cross-sectional survey of 415 individuals with unstable housing, including 383 slum dwellers and 32 homeless individuals, was conducted from November 2023 to April 2024. Data were collected using a structured questionnaire that included the Kessler Psychological Distress Scale (K6). Results The prevalence of SPD was 19.8% (18.5% among slum dwellers and 34.4% among the homeless). Multiple logistic regression revealed significant associations between SPD and female gender (p=0.000), labor exploitation (p=0.046), and debt (p=0.000). Notably, 68.7% of participants reported experiencing some form of labor exploitation, commonly involving contract rejections, forced overwork, wage theft, and physical or verbal abuse. Additionally, 43.7% were in debt, with 38.6% borrowing from moneylenders. Conclusions The prevalence of SPD among individuals with unstable housing in Ho Chi Minh City was significantly higher than that of the general population. Those with SPD frequently faced both labor and economic exploitation, without insufficient social protection. In terms of labor exploitation, policy interventions, particularly from an occupational health perspective, are necessary. To address economic exploitation through debt, given the prevalence of loan sharks, efforts to crack down on predatory lending and promote financial inclusion are essential.