What happened
On August 28, the People's Bank of China and the National Financial Regulatory Administration jointly issued the Opinions on Reforming and Improving Real Estate Credit Management to Accelerate the Construction of a New Model of Real Estate Development. The document adapts to changes in real estate supply and demand and aims to create a comprehensive, orderly connected real estate credit product and management system, promoting a virtuous cycle between finance and real estate.
For development loans, the Opinions adopt a lead bank system. Each project is assigned one lead bank, which may be a single lending bank or the lead bank of a syndicated loan, and project funds are managed in a closed account at that bank. Loan terms are set by sales cycle: pre-sale projects generally have terms no longer than three years with a five-year cap, while cash-sale projects generally have terms no longer than five years with a seven-year cap. In practice, development loan terms had typically ranged from one to three years due to a lack of unified national rules.
For individual housing loans, the maximum term is extended to 40 years from 30, with borrowers and banks negotiating the exact term. The Opinions also require that personal housing loans be disbursed through commissioned payment. For purchases of new homes sold on a cash-sale basis, the loan is released after sales filing; for pre-sale homes, it is released strictly after project completion filing. Experts said the lead bank system strengthens banks' whole-process supervision, and the longer mortgage term lowers monthly costs, boosting residents' willingness to buy.
Why it matters
The lead bank system gives banks full-process responsibility for project financing, making fund supervision more rigorous and helping to prevent funds from being diverted, a key step toward reducing project suspension risks and supporting the delivery of homes.
Extending individual housing loan terms to 40 years lowers monthly repayment costs, which analysts say can boost residents' willingness to buy homes. The policy also differentiates between cash-sale and pre-sale projects, favoring cash-sale developments and supporting the reform of the commodity housing sales system.
Overall, the Opinions point financial resources toward ensuring delivery, promoting transformation, and raising quality, reflecting the real estate industry's shift from scale expansion to stock management and quality improvement.
Key facts
The People's Bank of China and the National Financial Regulatory Administration jointly issued the Opinions on August 28.
The Opinions focus on optimizing two core systems: real estate development loans and individual housing loans.
Real estate development loans adopt a lead bank system, with closed management of project funds.
Pre-sale project loans have a general term of no more than 3 years and a maximum of 5; cash-sale project loans have a general term of no more than 5 years and a maximum of 7.
The maximum term of individual housing loans is extended from 30 years to 40 years.
Personal housing loans are to be disbursed through commissioned payment; for pre-sale homes, disbursement occurs after project completion filing.
Loan disbursement for cash-sale purchases is linked to sales filing.
What to watch next
How commercial banks implement the new rules, especially the 40-year mortgage term and the commissioned payment requirements.
Whether the lead bank system and closed fund management effectively reduce the risk of project defaults and unfinished developments.
The impact of the policy on the pace of commodity housing sales reform, particularly the shift toward cash-sale projects.