Banking

Banks resume loans to third-time homebuyers in Shanghai

By Nie Peng (chinadaily.com.cn)
Updated: 2010-07-09 15:31
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Several banks in Shanghai have resumed lending to third-time homebuyers and loosened criteria on identifying second-time housing purchases amid a sluggish housing market, the local newspaper Oriental Morning Post reported.

Managers of personal loans at the banks told the paper that they would not turn down applications from third-time homebuyers so long as the applicants maintain good credit records.

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For third-time housing purchases, the local branches of Industrial and Commercial Bank of China, China Merchants Bank and China Construction Bank all require a 20 percent increase from the benchmark lending rates, with the first two requiring a down payment of at least 60 percent and the latter 55 percent, the paper said.

In June, the Ministry of Housing and Urban-Rural Development and two other ministries announced criteria for identifying "second-time housing purchases". Accordingly, the number of homes a mortgage loan applicant owns should also take those of the other members of the household into account.

Banks in Shanghai virtually suspended lending to third-time homebuyers after the new policy was launched.

But on Wednesday, only Bank of Communications, Bank of China and China Minsheng Banking said they would definitely not lend to applicants who already have two housing loan records, the paper said.

Also, the paper reported that many banks apply their lending policies based on the client's borrowing records rather than the actual number of homes the household owns because "it is hard to identify their homes", said a banking source.