Ministry of Housing and Urban-rural Development, Ministry of Finance, People's Bank of China and China Banking Regulatory Commission, Circular on Issues Relevant to Regulating the Individual Housing Fund Mortgage Loan Policy

Issued: November 2 2010

Main contents: Where an employee family (including the borrower, spouse and minor children) that pays housing fund contributions (Employee Family) purchases its first unit of ordinary residential premises of no more than 90 square metres for self-use with an individual housing fund mortgage loan, the down payment shall be at least 20% of the loan, or 30% of the loan if the floor area is more than 90 square metres (Article 2). Individual housing fund mortgage loans for purchase of the second unit of residential premises may only be granted to Employee Families whose average floor area per person is lower than the local standard and that purchase ordinary residential premises for self-use to improve their living standard. The down payment for such loan used to purchase the second unit of residential premises shall be at least 50% of the loan, and the loan interest rate may not be lower than 1.1 times that for the first unit of residential premises over the same period (Article 3). The grant of individual housing fund mortgage loans to Employee Families that purchase the third or more unit(s) of residential premises shall be halted (Article 4).

Related legislation: State Council, Housing Funds Management Regulations (Revised), Mar 24 2002; and Circular on Determined Suppression of the Exceedingly Rapid Rise of Certain Urban Housing Prices, Apr 17 2010, CLP 2010 No.4 p.45