China’s Ministry of Housing and Urban-Rural Development, Ministry of Natural
Resources and National Financial Regulatory Administration issued a notice to
improve the commodity housing sales system and step up financing support for
property projects. The notice mandates a sponsor-bank system: each project
selects one sponsor bank by mutual choice with the developer; the sponsor bank
may provide development loans alone or lead a syndicate. If land-use rights are
pledged for development loans, mortgages should be set on aggregated subdivided
land-use rights, with detailed rules to follow. The notice explicitly supports
project development companies raising funds via equity, bonds and other
channels. For both completed-home sales and presales, financing should, on
market principles, meet reasonable project needs and align loan disbursement
with the project construction cycle.
