People's Bank of China and China Banking Regulatory Commission, Measures for the Administration of Loans for Development of Economically Affordable Residential Premises

Promulgated: January 18 2008
Effective: 30 days after the date of promulgation
Interpreting Authorities: People's Bank of China (PBOC) and China Banking Regulatory Commission

Applicability: The term “loans for development of economically affordable residential premises” refers to loans granted to borrowers that are used specifically for projects of developing and building economically affordable residential premises (Article 2). The term “lenders” refers to commercial banks and other financial institutions in the banking industry established according to law within the PRC. The term “borrowers” refers to real property developers with legal personality that have obtained the qualifications for real property development (Article 3).

Main Contents: The criteria for applying for loans for developing economically affordable residential premises include, inter alia, the following: the borrower has a paid-up capital of at least
Rmb10 million, has good creditworthiness and the capability to repay the principal and interests of the loan according to schedule; and the capital of the construction project (owner's equity) is not less than 30% of the total investment of the project and has already been contributed to the project before the funds from the loan are utilized (Article 4). The term of loans for development of economically affordable residential premises shall be three years in general, and may not exceed five years at maximum (Article 6). The interest rate for the loans for development of economically affordable residential premises shall comply with the interest rate policies of the PBOC. It may float downwards within the range of 10% (Article 7).