Article 1 The Measures are formulated in accordance with relevant state statutes for the purpose of supporting the construction of low-rent housing and safeguarding the legitimate rights and interests of borrowers and lenders.
Article 2 Low-rent housing construction loans in the Measures refer to loans used for construction or renovation of low-rent housing.
Article 3 Lenders in the Measures refer to banking financial institutions that are incorporated within the territory of the People s Republic of China in accordance with its law and approved by the China Banking Regulatory Commission and its dispatched agencies.
Borrowers in the Measures refer to eligible real estate development companies established pursuant to the law and engaged in the construction of low-rent housing.
Article 4 An application for low-rent construction loans must meet the following conditions:
1. The low-rent housing project is included in the government s annual plan for low-rent housing construction, and has been approved by competent government agencies.
2. An agreement on repurchase of the low-rent housing has been signed with the government.
3. A dedicated savings account shall be opened with the lending bank.
4. A valid collateral acceptable to the lender shall be provided.
5. Should the low-rent housing project be new construction, Certificate for the Use of State-owned Land, Planning Permit on Land for Construction Use, Planning Permit on Construction Works and Working Permit on Construction Works are required. Should the project be renovation of low-rent housing, it should have been approved by competent government agencies.
6. The share of registered capital of the project should not be lower than 20% of the total investment if the project is new construction of low-rent housing, and should not be lower than 30% if the project is of renovation nature.
7. The borrower has good credit standing without records of default.
8. Other conditions that may be decided by the lender.
Article 5 The lender shall reinforce pre-lending examination by investigating into and evaluating the borrower and the construction project in question. The borrower shall provide relevant documents to the lender upon the latter s request.
Article 6 The amount of the loan shall not exceed the repurchase price agreed in the repurchase contract.
Article 7 The term of the low-rent housing construction loan shall not exceed five years and subject to consultations between the borrower and the lender.
Article 8 The interest rate of the low-rent housing construction loan shall be 10% lower than the benchmark interest rate of loans with the same maturity and of the same category announced by the People s Bank of China.
Article 9 In principle, low-rent housing construction loans for one project shall be conducted by one bank alone. As for large-scale projects, syndicated bank loans are permitted.
Article 10 The lender shall manage the low-rent housing construction loan separately, set up an ad hoc accounting item for bookkeeping and separate accounting.
Article 11 The low-rent housing construction loan shall be managed in a close-ended manner, and funds shall be delivered according to work progress after the registered capital is paid in. The lender shall perform effective monitoring and management over fund that flows into and out of the dedicated savings account. A separate ledger should be created to record detailed information such as the time, debit or credit, use, recipient, amount and the receiver of each loan. The lender and the borrower shall sign a separate and close-ended agreement.
Article 12 The lender should supervise the borrower on loan using and ensure the following principles are observed:
1. The borrower shall use the loan for its specified purpose and shall not divert the loan for other purposes;
2. The borrower shall use the loan only after the registered capital of the project has is fully engaged;
3. The borrower shall use the loan according to the progress of construction.
Article 13 The lender should review the using of every loan and the borrower should report loan using, construction progress of low-rent housing and the accounting status on a regular basis.
Article 14 Low-rent housing loans should be guarantee loans. Where the borrower cannot provide full-value collateral (pledge), a third party acknowledged by the lender should provide guarantee and be held jointly liable.
Article 15 In case of the borrower s breach of contract, the lender may adopt the following measures:
Where the borrower diverted the loan for other purposes, the lender is entitled to cease the loan and reclaim the extended part of the loan;
Where the borrower failed to use the loan or repay the principal or the interests as accorded in the contract, the lender is entitled to claim penalty interest as accorded in the contract;
On the basis of mutual agreement, where the borrower can deliver full repayment in advance, the lender may not claim the penalty for breach of contract.
Article 16 The banking financial institutions extending loans for the construction of low-rent housing should formulate detailed operational rules according to the Measures.
Article 17 The PBC and the CBRC are responsible for the interpretation of the Measures. The PBC will disclose information on the quality of low-rent housing loan in various cities and regions with other agencies concerned.
Article 18 The Measures shall be implemented 30 days after its promulgation.
