Financial Regulatory Authority: "All-Inclusive" Loan Access and "Whitelist" Management for Residential Housing Projects

As of October 16th, loans for "whitelist" real estate projects have been approved totaling 2.23 trillion yuan. It is expected that by the end of 2024, the amount of loans approved for "whitelist" projects will double, exceeding 4 trillion yuan. On October 17th, the State Council Information Office held a press conference to introduce the situation regarding the promotion of stable and healthy development of the real estate market. At the meeting, Xiao Yuanqi, Deputy Director of the Financial Regulatory Authority, stated that since the beginning of the year, the Financial Regulatory Authority has worked with the Ministry of Housing and Urban-Rural Development to guide localities to establish urban real estate financing coordination mechanisms, support compliant real estate projects to enter the "whitelist," and guide financial institutions to increase financial support.

On September 26th, the Central Political Bureau meeting clearly demanded the promotion of the real estate market to stop falling and stabilize, and to increase the loan distribution for "whitelist" projects.

According to Xiao Yuanqi, the Financial Regulatory Authority is fully committed to implementing and further leveraging the role of urban coordination mechanisms, optimizing "whitelist" management, and supporting the stable development of the real estate market.

Firstly, all loans for commercial housing projects will be included in "whitelist" management, ensuring "all eligible projects are included." Xiao Yuanqi pointed out that, in principle, loans for commercial housing projects are managed through the "whitelist" mechanism. The "whitelist" mechanism for real estate projects has been established for more than half a year, and through the efforts of all parties, a series of good practices and experiences have been accumulated.

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Currently, the urban coordination mechanism has established a relatively complete institutional system in terms of government coordination and promotion, financial financing support, and judicial execution security. By including projects in the "whitelist," real estate project management becomes more standardized, financing becomes more convenient and faster, and it is more conducive to the completion and delivery of projects and the protection of the legitimate rights and interests of homebuyers.

Xiao Yuanqi stated that the conditions for managing all commercial housing project loans according to the "whitelist" mechanism are now in place. Real estate projects that meet the "whitelist" criteria should be managed according to the "whitelist" and ensure "all eligible projects are included."

In terms of process, two methods can be adopted as needed: review and filing. The review method refers to real estate project companies applying through existing processes, and after the urban coordination mechanism reviews, the project is included in the "whitelist" to obtain financing.

The filing method refers to real estate project companies directly applying for loans with financial institutions. Financial institutions approve loans according to conventional development loan conditions and processes. For projects that meet the loan conditions, they are approved and disbursed, and after filing with the urban coordination mechanism, the project is included in the "whitelist."Secondly, for projects that have entered the "white list," commercial banks should ensure "full lending as needed." Xiao Yuanqi introduced that under the guidance of the General Administration of Financial Supervision, banks are further intensifying their efforts based on the existing working group mechanisms, implementing loan disbursement progress for each project. Appropriately delegating approval authority and improving the efficiency of approval and disbursement, loans should be issued in a timely manner according to the construction progress of the projects. Coordination mechanisms in various cities should also actively coordinate with relevant parties to increase the resolution of problematic projects, implement loan disbursement conditions, and cooperate with financial institutions in loan review and issuance.

"In principle, if the relevant conditions and requirements remain unchanged, banks should ensure 'full lending as needed' for projects that have entered the 'white list,'" said Xiao Yuanqi.

Thirdly, optimize the disbursement method of loan funds to ensure "as early as possible."

At present, commercial banks disburse loan funds to real estate project companies in batches according to the construction progress of the projects and directly entrust payments to upstream and downstream enterprises such as material suppliers and construction parties.

Xiao Yuanqi stated that in the future, commercial banks may, with the unanimous consent of real estate project companies, advance the entire loan to the project fund supervision account opened by the real estate project company, based on the fund usage plan provided by the real estate project company. Subsequently, actual fund usage applications will be used to entrust payments from the supervision account to the fund recipients.

He expressed that the advantage of this approach is that loan funds can be quickly and early disbursed to the accounts of real estate "white list" project companies, paying upstream and downstream enterprises earlier, and enabling projects to start construction earlier. Since these loan funds enter a dedicated supervision account and are used for specific purposes, they will not be misappropriated and will be entirely used for the completion and delivery of real estate projects, safeguarding the legitimate rights and interests of homebuyers.

Xiao Yuanqi emphasized that to ensure real estate project financing and the completion and delivery of houses, sustained effort is required, with greater intensity and more practical measures to further optimize and improve the financing mechanism for real estate "white list" projects, ensuring that qualified projects "enter as much as possible," reviewed loans "are lent as much as possible," and fund disbursements are "as early as possible."