The National Financial Regulatory Administration and the People's Bank of China jointly issued the "Measures for the Administration of Individual Housing Loans (Trial)" on August 28, introducing new requirements for lenders to assess borrowers' repayment capacity more rigorously.

Under the new rules, lenders must set reasonable caps on borrowers' monthly housing loan payments relative to their income, taking into account local real estate market conditions and borrowers' income and debt profiles. The monthly housing loan payment-to-income ratio must be kept at or below 50%, while the total monthly debt payment-to-income ratio must not exceed 60%.

For single-applicant loans, the income used in these calculations refers to the applicant's own disposable income. If the lender includes the applicant's spouse's income, it must first verify this information and include the spouse's debts as well. For jointly applied loans, the income refers to the combined disposable income of both primary and co-applicants, with co-applicants' debts also factored into the calculation.

The measures also stipulate that interest rates on individual housing loans should follow market-oriented principles, with rates determined through negotiation between lenders and borrowers while complying with national regulations and industry self-discipline requirements. Lenders are required to establish differentiated risk-based pricing mechanisms, setting specific interest rate levels based on local market conditions and borrowers' credit profiles and repayment abilities.

Loan tenors are to be reasonably determined by lenders, with a maximum term of 40 years. The full text of the measures is as follows:

Chapter 1: General Provisions

Article 1: These measures are formulated to regulate individual housing loan business, strengthen prudent management of such lending activities, protect the legitimate rights and interests of both lenders and borrowers, promote the healthy development of housing loan business, and accelerate the establishment of a new model for real estate development, in accordance with the Civil Code of the People's Republic of China, the Law of the People's Republic of China on Banking Regulation and Supervision, the Law of the People's Republic of China on the People's Bank of China, the Law of the People's Republic of China on Commercial Banks, other relevant laws and regulations, as well as the "Opinions on Reforming and Improving Real Estate Credit Management to Accelerate the Establishment of a New Model for Real Estate Development."

Article 2: For the purposes of these measures, "lenders" refer to financial institutions established within the territory of the People's Republic of China that absorb public deposits, including commercial banks, rural cooperative banks, and rural credit cooperatives.

Article 3: "Individual housing loans" refer to loans extended by lenders to eligible borrowers for the purpose of purchasing residential properties.

Article 4: Lenders conducting individual housing loan business shall adhere to the principles of legal compliance, prudent operations, equality and voluntariness, and fairness and good faith.

Article 5: Lenders shall establish effective full-process management mechanisms for individual housing loans, formulating loan management systems and operational procedures.

Article 6: The National Financial Regulatory Administration and its local offices shall supervise and manage individual housing loan business in accordance with the law.

Chapter 2: Loan Targets and Conditions

Article 7: Borrowers must simultaneously meet the following conditions: (1) being a citizen of the People's Republic of China with full capacity for civil conduct, or a foreign national meeting relevant state regulations; (2) possessing valid and lawful identification documents; (3) maintaining a good credit record; (4) demonstrating willingness and ability to repay; (5) having the capacity to pay the down payment for the purchased property; (6) being able to provide effective guarantees acceptable to the lender; and (7) meeting other conditions specified by the lender.

Article 8: The down payment ratio for individual housing loans shall not be lower than the minimum down payment ratio determined by the People's Bank of China and the National Financial Regulatory Administration. Lenders may reasonably determine specific down payment ratios based on local real estate market conditions, housing project circumstances, and borrowers' credit status and repayment abilities.

Article 9: Lenders shall verify the authenticity of borrowers' down payments, with deposits already paid by borrowers eligible to be counted toward the down payment. If a lender discovers that a borrower has used loan funds to pay the down payment, the lender shall cease disbursing the individual housing loan.

Article 10: Lenders shall focus on assessing borrowers' repayment capacity, reasonably setting caps on the monthly housing loan payment-to-income ratio and the monthly total debt payment-to-income ratio based on factors such as local real estate market conditions and borrowers' income and debt situations. The monthly housing loan payment-to-income ratio shall be controlled at 50% or below, and the monthly total debt payment-to-income ratio shall be controlled at 60% or below. The calculation formula is as follows: For single-applicant loans, the income in the above formula refers to the applicant's own disposable income. If the lender includes the applicant's spouse's income, it shall first investigate and verify this, including the spouse's debts in the calculation. For jointly applied loans, the income refers to the disposable income of both the primary applicant and co-applicants, with co-applicants' debts also included.

Article 11: Lenders shall require borrowers to provide the purchased property as mortgage collateral for the loan. For purchases of completed properties or resale housing, mortgage registration shall be completed before loan disbursement. For purchases of pre-sold commercial housing, mortgage pre-registration shall be completed before loan disbursement, with formal mortgage registration to be handled promptly once relevant conditions are met. If mortgage registration or pre-registration cannot be completed before loan disbursement, alternative interim guarantees such as other property mortgages, pledges, or guarantors shall be provided.

Article 12: Individual housing loan interest rates shall follow market-oriented principles, determined through negotiation between lenders and borrowers while complying with national regulations and industry self-discipline requirements, with pricing benchmarks and methods implemented in accordance with relevant provisions. Lenders shall establish customer-differentiated risk-based pricing mechanisms, setting specific interest rate levels reasonably based on local real estate market conditions and borrowers' credit status and repayment abilities.

Article 13: Lenders shall reasonably determine loan tenors, with a maximum term not exceeding 40 years.

Article 14: Borrowers may negotiate and agree with lenders on loan repayment plans. For loans with terms of one year or less, repayment may be made in a single lump sum of principal and interest at maturity or through monthly payments; for loans with terms exceeding one year, monthly principal and interest payments shall be made.

Chapter 3: Loan Approval and Disbursement

Article 15: Lenders shall require borrowers to submit written applications for individual housing loans and provide materials proving their eligibility, including: (1) borrower identification documents; (2) proof of repayment capacity; (3) online-filed and verified property transaction contracts, agreements, or other approval documents; (4) lists of collateral or pledged items, ownership certificates, valuation documents, and proof of consent from parties with disposal rights to pledge or mortgage; written guarantee documents and credit certificates from guarantors agreeing to provide guarantees; and (5) other documents or materials required by the lender.

Article 16: After accepting loan applications, lenders shall conduct due diligence investigations, combining on-site field investigations with off-site indirect investigations, using methods such as on-site verification, telephone inquiries, information consultations, and other digital electronic investigation approaches to verify the authenticity, accuracy, and completeness of loan application contents and related information, forming investigation and evaluation opinions.

Article 17: Lenders shall establish and implement loan interview systems. Before final approval of loan applications, loan handling personnel shall conduct at least one direct face-to-face interview with the borrower to understand the borrower's basic situation and the intended use of the loan.

Article 18: Lenders shall sign written loan contracts with borrowers, along with guarantee contracts or clauses. Lenders shall require borrowers to sign loan contracts and related documents in person.

Article 19: Lenders shall follow objective and prudent principles in assessing or determining the value of collateral provided by borrowers, reasonably determining collateral value. The collateral value shall be determined as the lower of the transaction price in the property sale or the assessed valuation.

Article 20: Where borrowers purchase properties with outstanding loans, lenders may provide loan services for transfers with existing mortgages, ensuring effective coordination of registration, lending, disbursement, repayment, and final settlement.

Article 21: Matters not covered in this chapter regarding loan review and risk assessment, approval and disbursement, agreement signing, and collateral registration shall be implemented in accordance with Articles 19 through 21, Articles 23 through 25, and Articles 27 through 31 of the "Measures for the Administration of Individual Loans."

Article 22: For purchases of completed properties, lenders shall disburse loans after sales filing, with loan funds paid through entrusted payment to the capital account opened by the housing project developer at the lead bank. For purchases of pre-sold commercial housing, lenders shall disburse loans after completion filing, with loan funds paid through entrusted payment to the pre-sale fund supervision account. For purchases of resale housing, lenders shall disburse loans after securing guarantees (including necessary interim guarantees), with loan funds paid through entrusted payment to the account designated in the loan contract. Where the National Financial Regulatory Administration has separate provisions regarding loans for property transfers with existing mortgages, those provisions shall prevail.

Article 23: Lenders shall strengthen management, monitoring, and evaluation of partner institutions for individual housing loans, defining qualification criteria for partners, establishing list-based management systems and conflict-of-interest prevention mechanisms, regularly reviewing and updating the lists, and taking measures such as terminating cooperation and recovering losses for partners' violations or breaches. Lenders shall not cooperate with illegal loan intermediaries. Where partner institutions are involved in individual housing loans, core risk-control matters, including credit approval, contract signing, and loan investigation involving borrowers' true intent, income levels, debt situations, and access to external valuation institutions, shall be independently and effectively conducted by the lender. Where lenders entrust specific matters to partner institutions, they shall strengthen cost management, avoid harming borrowers' legitimate rights, and ensure related risks are controllable. Partner institutions referred to in the preceding paragraph include, but are not limited to, real estate development enterprises, property transaction intermediaries, valuation institutions, and guarantee companies.

Chapter 4: Post-Loan Services and Management

Article 24: Lenders shall conduct follow-up inspections and monitoring of changes in borrowers' credit and guarantee conditions to ensure the safety of loan assets.

Article 25: During the loan term, lenders shall reassess collateral value at least annually and continuously monitor collateral condition and ownership to ensure controllable risks. For disbursed individual housing loans, lenders shall not use the re-assessed net value of mortgaged properties as additional collateral for new housing loans until the borrower has fully repaid the original loan.

Article 26: Where borrowers apply for loan extensions, lenders shall prudently assess the reasons for extension and the feasibility of subsequent repayment arrangements. If approved, lenders shall reasonably determine the extension period based on repayment sources, strengthen subsequent loan management, and classify risks according to actual risk conditions. The cumulative extension period shall not exceed half of the original loan term, and the combined original term and extension period shall not exceed 40 years.

Article 27: During the loan term, changes to loan contract terms shall require mutual agreement between both parties and be formalized through amended agreements in accordance with the law.

Article 28: Where disputes arise under loan contracts, both parties shall promptly seek resolution through negotiation. If negotiation fails, either party may apply for arbitration or initiate litigation in a people's court in accordance with the law.

Article 29: Lenders shall collect loan principal and interest in accordance with loan contract terms. For loans not repaid as stipulated, lenders shall take measures such as collection, negotiated restructuring, debt transfer, or write-off for disposition.

Article 30: After borrowers repay all loan principal and interest in accordance with the contract, the loan contract shall terminate, and lenders shall promptly release guarantees as stipulated. Where real estate serves as collateral, mortgage cancellation registration shall be processed at the original registration authority upon release.

Article 31: Lenders may pursue liability for breach of contract or other legal liability against borrowers under the following circumstances: (1) failing to repay loan principal and interest on schedule; (2) providing false documents or materials that have caused or may cause loan losses; (3) demolishing, selling, transferring, or donating mortgaged or pledged property or rights without lender consent; (4) arbitrarily changing loan purposes or misappropriating loan funds; (5) refusing or obstructing lenders' supervision and inspection of loan usage; (6) signing contracts or agreements with other natural persons, legal entities, or economic organizations that harm lenders' rights and interests; (7) where guarantors breach guarantee contracts or lose the capacity to bear joint liability, where mortgagor conduct causes collateral value to decline, where pledged items significantly diminish affecting lenders' realization of pledge rights, and borrowers fail to restore collateral value or provide new guarantees or new mortgages (pledges) as required; and (8) other circumstances as provided by the Civil Code of the People's Republic of China and other laws and regulations.

Article 32: Lenders shall assign responsibility for individual housing loan management to specific departments and positions, establishing assessment and accountability mechanisms for each position.

Chapter 5: Supervision and Administration

Article 33: The National Financial Regulatory Administration and its local offices may, based on lenders' operational management conditions, risk levels, individual housing loan business development, and real estate market conditions, impose relevant prudential regulatory requirements on their individual housing loan management.

Article 34: Where lenders violate these measures in handling individual housing loan business, the National Financial Regulatory Administration and its local offices shall order corrective action within a specified period and may, in accordance with the Law on Banking Regulation and Supervision, the Law on Commercial Banks, the Measures for the Administration of Individual Loans, and other laws and regulations, take relevant regulatory measures or impose administrative penalties as appropriate.

Chapter 6: Supplementary Provisions

Article 35: Loans for the purchase of allocated-type affordable housing shall be handled with reference to these measures.

Article 36: These measures shall be interpreted by the National Financial Regulatory Administration and the People's Bank of China.

Article 37: These measures shall take effect from the date of issuance. The "Measures for the Administration of Individual Housing Loans" (Yinfa [1998] No. 190) shall be simultaneously repealed. Where other provisions on individual housing loans are inconsistent with these measures, these measures shall prevail. For projects that have already obtained pre-sale permits before the implementation of these measures, the conditions for individual housing loan disbursement may continue to follow the original provisions.