The Financial Regulatory Administration has released management measures related to real estate financing, aimed at reforming and improving the real estate financing system.

On August 28, the Financial Regulatory Administration issued five financing management measures in the real estate sector, including the Management Measures for Development Loans for Commodity Housing (Trial), systematically restructuring the real estate financial system from five aspects: development loans, personal housing loans, commercial real estate loans, urban renewal loans, and trust business. Development loans for commodity housing will adopt a hosting bank model, reasonably distinguishing between the risks of real estate enterprise groups and individual projects, and providing loans impartially to projects of different types of ownership. Each project will have its own accounting, with independent management and closed financial operations. The loan term for pre-sale projects shall not exceed 5 years, and for current-sale projects, not exceed 7 years. There will be increased support for the sale of completed houses and "good housing" projects. All loan projects issued under these measures will be included in the white list management. Personal housing loans will adjust the issuance timing of pre-sale commodity housing loans from the completion of the main structure to the completion filing, appropriately optimize the upper limit of the income-to-debt ratio, extend the maximum loan term, and introduce convenience arrangements such as transfer with mortgage. Commercial real estate loans will be divided into three phases: development, purchase, and operation. Urban renewal loans will have specific varieties established. Trust business will focus on projects, enhancing closed management of funds. Original text as follows: Management Measures for Development Loans for Commodity Housing (Trial) Chapter One General Principles Article 1 To standardize the operational conduct of banking financial institutions in commodity housing development loan business, strengthen prudent management of commodity housing development loans, meet the reasonable financing needs of commodity housing development projects, and support the construction of a new model for real estate development, these measures are formulated in accordance with the Law of the People's Republic of China on the Regulation of Banking Industry and Law of the People's Republic of China on Commercial Banks and other relevant laws and regulations. Article 2 The term lender as used in these measures refers to legally established financial institutions in the People's Republic of China that accept public deposits, such as commercial banks, rural cooperative banks, and rural credit cooperatives. Article 3 The term commodity housing development loan as used in these measures refers to the loans issued by the lender to real estate project development companies (hereinafter referred to as the borrower), used for the development and construction of commodity housing and its supporting facilities. Article 4 Lenders engaging in commodity housing development loan business shall adopt a hosting bank model, reasonably distinguish between the risks of real estate enterprise groups and single projects, and make independent decisions based on market-oriented and legal principles, providing loans to projects of different ownership types in an impartial manner. Chapter Two Project and Borrower Conditions Article 5 The lender shall carefully assess the situation of the commodity housing development project. The project must meet at least the following conditions: (1) Possess legitimate, complete, authentic, valid project filing or registration documents, land property certificates, land use planning permits, construction project planning permits, and construction permits. If there are additional local regulations regarding the four certificates, such regulations shall apply, provided they have equivalent validity to possessing the complete four certificates. If environmental impact assessments, cultural relic explorations, and other matters are involved, the corresponding regulations must be satisfied. (2) Comply with national relevant regulations on the capital system for fixed asset investment projects, with actual capital contributions in place. (3) Demonstrate a genuine financing need, and the borrower has developed a loan usage plan and project construction delivery plan. (4) Provide collateral that matches the loan amount. (5) Conduct independent accounting for the project, with independent operation and closed management of funds. Funds should not be mixed between projects. Article 6 The lender shall carefully assess the borrower's situation. The borrower must meet at least the following conditions: (1) Possess qualifications for real estate development. (2) Exhibit good debt repayment capability. (3) Not be undergoing bankruptcy reorganization, large-scale confiscation or freezing, and not have major violations of laws and regulations, including evading financial debts. (4) The enterprises registered capital must be fully paid. Chapter Three Hosting Bank Article 7 When a borrower applies for a commodity housing development loan, they shall negotiate with the lender to agree on one hosting bank, which will be stipulated in the contract, with the hosting bank either issuing loans alone or acting as the lead bank in a syndicate to issue the commodity housing development loans. Each project can only confirm one hosting bank, which may be a legal entity or a branch. Article 8 The borrower shall open a financial account at the hosting bank. During the project's duration, except for pre-sale funds and deposits required to be regulated as stipulated, all funds related to the commodity housing development loan, project own funds, and funds from the sale of completed houses shall be managed within this financial account. The hosting bank and the financial account shall generally not change before the commodity housing development loan is cleared. Regulatory accounts for project pre-sale funds and deposit accounts should be opened at the hosting bank as required. Article 9 The hosting bank and syndicate members shall conduct due diligence, project review, post-loan checks, and balance the risk control, providing financing services for the project. The hosting bank shall lead the account management, enhance monitoring of loan funds, and strictly review the usage and flow of credit funds, taking timely measures if any anomalies in the loan funds are discovered. Syndicate members shall actively support the hosting bank in fulfilling the above responsibilities, sharing information in a timely manner, and collaboratively managing project funds. Article 10 The commodity housing development loans issued by the lender can only be used for commodity housing development projects in this city. The term city as used in this article refers to cities at the prefecture level and above. Chapter Four Business Processing Article 11 The borrower shall submit a development loan application to the lender, who will process the application in accordance with procedures and conduct a pre-loan investigation. Article 12 The lender shall clarify the approval authority for commodity housing development loans according to the principles of separation of review and loan issuance and hierarchical approval, and standardize the loan examination and approval process. Article 13 The lender shall stipulate the specific loan amount, term, interest rate, usage, guarantee method, borrower commitments, repayment plan, risk disposal, and associated details in the contract with the borrower. Among these: (1) Loan amount. The lender shall comprehensively consider the total investment amount of the project, capital contribution, own funds, other financing, and refer to the construction cost level of similar local projects to reasonably determine the loan amount to meet the project financing needs. (2) Loan term. The lender shall comprehensively evaluate the construction cycle, sales cycle, and risk level of the commodity housing project to reasonably determine the loan term. The loan term for pre-sale projects shall generally not exceed 3 years, with a maximum of 5 years; the loan term for current-sale projects shall generally not exceed 5 years, with a maximum of 7 years. (3) Loan interest rate. The interest rate for commodity housing development loans should follow the principles of marketization and commercial sustainability. The lender shall reasonably determine the loan interest rate while complying with national regulations and industry self-regulatory management requirements. (4) Loan usage. The loan is to be used for the development and construction intended for market sale or rental, among other purposes, of commodity housing projects. Increased support for development loans for completed housing projects and safe, comfortable, green, smart good housing projects. Loans cannot be used across projects, nor for paying land transfer fees and related taxes, project dividends, or other investment. (5) Guarantee method. The lender should strictly implement the mortgage guarantee measures for commodity housing development loans, using the land use rights of the project and ongoing construction as collateral, and legally completing the registration of mortgage rights over real estate according to relevant regulations. When establishing a mortgage, it should ensure that the ownership of the collateral is clear, and houses and land that have undergone advance registration or online signing cannot be used as collateral. Additional shareholder guarantees, equity pledges, or other credit enhancements can be added as necessary. (6) Borrower commitments. The lender should require the borrower to commit to essential aspects related to the loan in the contract, including but not limited to: the borrower shall strictly use funds according to the contract, shall not covertly withdraw project loan funds, shall not illegally allocate project loan funds or project income to the real estate enterprise group, parent company, or other related enterprises, and shareholders shall not withdraw project capital; when establishing a mortgage, it shall not include already sold properties and their land within the scope of the mortgage. Article 14 The lender shall stipulate drawdown conditions in the contract with the borrower, including but not limited to that the capital has been fully contributed, project construction progress meets the requirements, and collateral has been registered. Article 15 The lender shall issue the loan strictly in accordance with the agreed drawdown conditions through entrusted payment, with the disbursement progress matching the actual construction progress of the project. Article 16 The lender shall stipulate repayment arrangements in the contract with the borrower, with the first repayment date generally after the completion and filing of the commodity housing project, and may be negotiated to repay the principal early. The borrower shall ensure sufficient first repayment sources, with sales revenue being prioritized for repaying project development loans. Chapter Five Risk Management Article 17 The lender shall develop and complete management systems for commodity housing development loans according to these measures, clearly defining approval standards, operating procedures, risk control, and post-loan management content, strictly implementing uniform credit requirements, practicing full-process management, and strengthening pre-loan investigations, in-loan reviews, and post-loan checks, effectively ensuring the security of credit funds. Article 18 The lender shall strengthen risk monitoring and periodically check and analyze the borrowers performance and credit status, significant fluctuations in equity structure, the project construction and operational situation, and changes in loan guarantees, promptly identifying risks and adopting response measures. It should also account for significant negative impacts arising from related enterprises of the borrower, enhancing risk prevention. Article 19 The lender shall conduct risk classification in strict accordance with regulatory requirements and adjust classification results dynamically based on the borrowers performance capability and changes in loan risk. For loans not repaid as stipulated in the borrower contract, the lender shall take timely measures such as collection, agreement restructuring, debt transfer, or write-off to address the situation and systematically resolve loan risks. Article 20 The lender shall establish a real estate industry risk early warning and assessment system. It shall closely monitor changes in the real estate market and conduct stress testing of commodity housing development loans periodically. Article 21 The lender shall strengthen management of third-party institutions engaged in asset assessment for commodity housing development loan business, clarify qualification criteria for cooperating institutions, and establish a sound admission and evaluation mechanism. Article 22 The lender shall conduct internal audits of the commodity housing development loan business of internal functional departments and branch institutions annually. Article 23 The lender shall assign responsibility for managing commodity housing development loans to specific departments and positions, establishing assessment and accountability mechanisms for each position. Chapter Six Supervision and Management Article 24 The National Financial Supervision and Administration and its dispatched agencies shall supervise and manage the commodity housing development loan business according to law and may put forward relevant prudent regulatory requirements based on the lenders operational management situation, risk level, and the status of commodity housing development loan business. Article 25 If lenders engage in commodity housing development loan business in violation of these measures, the National Financial Supervision and Administration and its dispatched agencies shall order them to correct the situation within a specified period and may, according to law, take regulatory measures or impose administrative penalties on related institutions or personnel. Chapter Seven Supplementary Provisions Article 26 Commodity housing development projects to which loans are issued according to these measures will be included in white list project management, promptly reporting relevant information to the citys real estate financing coordination mechanism. Article 27 If financial management departments have specific regulations on development loans for rental housing, guaranteed housing, etc., those regulations shall prevail. After these measures take effect, if any other regulatory provisions regarding commodity housing development loans conflict with these measures, these measures shall prevail. For other matters not specified, the relevant regulations on fixed asset loans shall apply. Article 28 These measures shall be explained by the National Financial Supervision and Administration. Article 29 These measures shall take effect from the date of issuance. For projects with new loan contracts signed after these measures take effect, they shall be implemented according to these measures. Projects with loan contracts signed before these measures take effect shall continue to be executed according to the contract provisions. Heads of relevant departments of the National Financial Supervision and Administration Answering reporters questions regarding the release of real estate-related financing management measures by the General Administration Recently, the Financial Regulatory Administration issued the Management Measures for Development Loans for Commodity Housing (Trial), Management Measures for Personal Housing Loans (Trial), Management Measures for Commercial Real Estate Loans (Trial), Management Measures for Urban Renewal Project Loans (Trial), and Management Measures for Trust Companies in Real Estate Sector Trust Business (Trial), with relevant department heads answering reporters' questions regarding these issues. 1. What is the background for the publication of the Management Measures for Development Loans for Commodity Housing (Trial), Management Measures for Personal Housing Loans (Trial), Management Measures for Commercial Real Estate Loans (Trial), Management Measures for Urban Renewal Project Loans (Trial), and Management Measures for Trust Companies in Real Estate Sector Trust Business (Trial)? The Financial Regulatory Administration firmly implements the decisions and deployments of the Party Central Committee and the State Council. Based on a comprehensive review of existing policies in the real estate financial sector and taking into consideration the real estate market situation and future development directions, in coordination with the Ministry of Housing and Urban-Rural Development and the Peoples Bank of China, it has issued related systems in an orderly manner to clarify the management requirements concerning development loans for commodity housing, personal housing loans, commercial real estate loans, urban renewal project loans, and trust business in the real estate sector, forming a financing system compatible with the new model of real estate development, guaranteeing legitimate rights and interests of homebuyers, meeting reasonable financing demands in real estate, and promoting high-quality development in the real estate sector. 2. How does the Management Measures for Development Loans for Commodity Housing (Trial) meet the reasonable financing needs of commodity housing development projects? These measures guide banking financial institutions to operate according to market-oriented and legal principles with a focus on projects, employing a hosting bank model to meet the reasonable financing needs of commodity housing development projects. The measures require banking financial institutions to reasonably distinguish between the risks of real estate enterprise groups and project risks, with loan approvals focusing more on the projects themselves, conducting independent accounting for each project, with independent and closed management of funds, effectively preventing delivery and credit risks related to the projects. To align with the construction and sales cycles of pre-sale and current-sale projects in the sales systems, the measures provide differentiated requirements for loan terms, suitably extending loan terms for current-sale projects. The measures are linked with the white list mechanism, incorporating commodity housing development projects that receive loans under these measures into white list project management, allowing the white list policies to benefit more commodity housing development projects. 3. How does the Management Measures for Personal Housing Loans (Trial) better support rigid and improvement housing needs? To facilitate the reform of commodity housing sales systems and help build a new model of real estate development while better serving personal housing loan demands under the current and pre-sale concepts, the Financial Regulatory Administration, together with the Peoples Bank of China, formulated the Management Measures for Personal Housing Loans (Trial). These measures align with the jointly issued Opinions on Reforming and Improving Real Estate Credit Management and Promoting the Construction of a New Model of Real Estate Development issued by the Peoples Bank of China and the Financial Regulatory Administration, guiding banking financial institutions to support rigid and improvement housing needs according to market-oriented and legal principles and better safeguard the legitimate rights and interests of homebuyers. In terms of safety, the measures adjust the issuance timing of personal housing loans for pre-sale commodity housing from the completion of the main structure to completion filing and require strengthened whole-process risk management of the loans, fundamentally safeguarding the legitimate rights and interests of homebuyers. In terms of availability, the measures appropriately optimize the upper limits for income to debt ratios and extend the maximum loan term limits, which helps moderately improve homebuyers borrowing capacity and provides more loan options for buyers to choose from. In terms of economy, the measures include provisions for transfer with mortgage to facilitate second-hand house transactions, thereby lowering transaction costs and better addressing improvement housing needs; at the same time, they also require banking financial institutions to enhance their management of cooperating third-party organizations and prevent illegal loan intermediaries from infringing upon the legitimate rights and interests of homebuyers. 4. What are the main contents of the Management Measures for Commercial Real Estate Loans (Trial) and how do they adapt to the credit needs of the commercial real estate market under the new model of real estate development? To promote the standardized development of commercial real estate loans and support the stable and orderly operation of the commercial real estate market, the Financial Regulatory Administration formulated the Management Measures for Commercial Real Estate Loans (Trial). These measures define the scope of commercial real estate loans, introduce the hosting bank system, project-based management, and closed management, requiring banks to establish a sound management mechanism for commercial real estate loans to effectively identify, assess, monitor, control, and mitigate risks and conduct business in accordance with law and regulations. Considering the differences in funding needs and sources of repayment during the stages of commercial real estate development, purchase, and operation, the measures categorize commercial real estate loans into these three phases. Based on the financing characteristics of each phase, the measures set forth detailed requirements for loan usage, terms, customer and project access, and loan management, better adapting to the credit needs of the commercial real estate markets development. To ensure smooth system transitions, the usage of loans for commercial properties can be executed in accordance with directives on managing commercial property loans, etc. 5. What financial measures does the Management Measures for Urban Renewal Project Loans (Trial) propose to support urban renewal? To deeply implement the decisions and deployments of the Party Central Committee and the State Council regarding high-quality advancement of urban renewal, the Financial Regulatory Administration, in conjunction with the Ministry of Housing and Urban-Rural Development, created the Management Measures for Urban Renewal Project Loans (Trial). These measures clarify the basic principles for financial institutions conducting urban renewal project loan business, detailing access conditions, loan usage, repayment sources, and funds management requirements. The measures guide financial institutions to set up specialized Urban Renewal Project Loans, reasonably determining loan amounts, terms, interest rates, and guaranteed measures, enhancing the precision, adaptability, and effectiveness of financial services in urban renewal. At the same time, they encourage financial institutions to leverage their advantages to design comprehensive financial service solutions based on the characteristics of urban renewal projects while managing risks effectively, thereby increasing financial support for urban renewal projects. 6. What is the primary purpose and main content of the Management Measures for Trust Companies in Real Estate Sector Trust Business (Trial)? These measures adhere to principles of serving the real economy, ensuring controllable risks, and implementing investor suitability management. They require trust companies to follow market-oriented and legal principles, leverage their unique advantages, strengthen professional capacity building, and enhance the adaptability, legality, and sustainability of trust services while treating projects of different ownership types equally to promote the emergence of diversified financial service channels suitable for the new mode of real estate development. The measures aim to enhance the precision and adaptability of trust services in connecting with real estate projects. They emphasize guiding trust companies to focus on projects, innovatively adopting a hosting bank model and further improving closed management of funds, effectively strengthening the protection of investors' legitimate rights and interests. The measures facilitate trust companies in developing management mechanisms, fulfilling fiduciary responsibilities, and improving service levels according to the regulatory characteristics of the real estate industry. They explicitly define relevant business in the real estate sector for trust companies, classifying the business and principles of operation, and elaborating requirements for asset management trusts in terms of conducting thorough due diligence, centralized decision-making, and project management, while also detailing requirements for investing in non-standardized assets. For asset services trusts, they clarify the legality of trust purposes, authenticity of property, and clarity of rights and obligations. This article is excerpted from the Financial Regulatory Administration official website, edited by Chen Siyu.