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Procedures of Shanghai Municipality on the Management of Loans to Individuals for the Purchase of Housing from Common Reserve
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| (Promulgated by the People' s Government of Shanghai Municipality on July 7,1999) Chapter I General Provisions Article 1 Purpose and Basis In order to promote the reform of the housing system, encourage individuals to purchase their own housing and regulate loans for the purchase of housing from common reserve funds, these Procedures are formulated in accordance with the provisions of Regulations on the Management of Common Reserve Funds for Housing by the State Council and Regulations of Shanghai Municipality on the Common Reserve Funds for Housing. Article 2 Organs of Management The Common Reserve Funds Management Center of Shanghai Municipality (hereinafter referred to as the Municipal Common Reserve Funds Center) shall be the lender of loans to individuals for the purchase of housing from the common reserve funds (hereinafter referred to as common reserve funds loan). The Municipal Common Reserve Funds Center shall be responsible for the formulation of plans for the use of common reserve funds in the form of loans and the preparation of reports on their implementation, for examination and approval of application for loans from the common reserve funds and for supervision of lending and settlement of common reserve funds loans. The Municipal Common Reserve Funds Center shall take the risks in common reserve funds loans. Article 3 Commission of Loan Transactions Common reserve funds loan transactions in this Municipality shall be commissioned by the Municipal Common Reserve Funds Center to commercial banks in this Municipality. A written contract for the commission shall be signed between the Municipal Common Reserve Funds Center and the commissioned bank. The Municipal Common Reserve Funds Center shall, in accordance with the provisions of the commission contract, check and supervise the use of common reserve funds for loans and the commissioned bank shall, in accordance with the provisions of the commission contract, submit regular reports on the relevant statistics to the Municipal Common Reserve Funds Center. The Municipal Common Reserve Funds Center shall publish annual plans for the use of common reserve funds and the implementation of such plans. Article 4 Guarantee for Loans The borrower of common reserve funds loans must provide guarantees acceptable to the lender. The procedures of guarantee for common reserve funds loans shall be formulated separately. When the borrower borrows simultaneously from the common reserve funds and the commercial banks, the Municipal Common Reserve Funds Center shall be the first beneficiary of the guarantee for the combined loan. Article 5 Types of Houses Houses the borrower may use the loan to buy shall be those on state-owned land that have ownership titles. The houses bought shall be used by the borrower and his family. Chapter II Conditions of Loans Article 6 Qualifications of the Borrower Employees who apply for common reserve funds loans must meet all of the following qualifications simultaneously: 1. The borrower has permanent residence in the cities or towns of this Municipality; 2. The borrower has paid contributions to the common reserve funds for 6 consecutive months with the accumulated time of paying such contributions being no less than 2 years before applying for the loan; 3. The house to be bought meets the architectural design standards set by the Municipal Common Reserve Funds Center; 4. The down payment for the house is not lower than the prescribed percentage; 5. The borrower has a fairly stable financial income and the capability to repay the loan; 6. The borrower has no previous debts of considerable amount which may affect his/her capability to repay the loan. The architectural design standards mentioned in Item 3 of the preceding Section and the prescribed percentage mentioned in Item 4 of the preceding Section shall be set by the Municipal Common Reserve Funds Center and shall become effective upon approval by the Shanghai Municipal Housing Committee. The said design standards and prescribed percentage shall be made public to the society. Article 7 Co-Borrower The spouse of the borrower or members of the household may become co-borrowers of the loan. The co-borrowers shall bear joint and several liability for repayment of the common reserve funds loan. If the spouse of the borrower or members of the household want to become co-borrowers of the loan, they must meet the condition set in the first clause of Article 6 of these Procedures. Article 8 Term of Loan The term of a common reserve funds loan shall not exceed 20 years, and shall not be longer than 5 years after the legal retirement age of the borrower. In the case of co-borrowing, the term of the loan shall not exceed 20 years, and shall not be longer than 5 years after the legal retirement age of the youngest of the co-borrowers. If the term of the loan the borrower applies for is shorter than the longest term set in the first and second Sections of this Article, the term of the loan shall be the term the borrower applies for. Article 9 Limit on the Amount of Loan The amount of a common reserve funds loan shall conform to the following limitations simultaneously: 1. Not more than the limit set by multiplying the borrower' s balance in his common reserve funds account by a certain number; 2. Not more than the limit set by a percentage of the total price of the house; 3. Not more than the limit set by the borrower' s capability of repayment, the formula for the calculation of which is: the salary base on which the monthly payment to the common reserve funds is calculated x a set percentage x12 months x term limit of loan; 4. Not more than the highest amount of loan. In the case of co-borrowing, the limit on the amount of loan set in Item 1 and Item 3 of the preceding Section shall be the total of each borrower separately calculated. As to the term of loan for each borrower mentioned in Item 3 of this Article, if the term of the loan the borrower applies for is shorter than the longest term set in Section 2 of Article 8, the term of the loan shall be the term the borrower applies for; if the term of the loan the borrower applies for is longer than the longest term set in Section 2 of Article 8, then the longest term set in Section 2 of Article 8 shall hold. The number for multiplication, the percentage, and the highest amount of loan mentioned in the first Section of this Article shall be proposed by the Municipal Common Reserve Funds Center and shall become effective upon approval by the Shanghai Municipal Housing Committee. The said number for multiplication, the percentage, and the highest amount of loan shall be made public to the society. Article 10 Method of Calculating the Amount of Loan The specific amount of each loan shall be determined by the amount of loan applied for by the borrower and the limit on the amount of loan set in Article 9. If the amount applied for does not exceed any of the limits set on the amount of loan, the applied-for amount shall be the amount of actual loan. If the amount applied for exceeds the limits set on the amount of loan, then the smallest amount allowed by the limits shall be the actual amount of loan. Article 11 Interest on Loan Interest on the common reserve funds loan shall follow the rate approved by the State Council. Article 12 Method of Calculating the Amount of Monthly Repayment For common reserve funds loans with a term of not more than a year, both the principal and interest shall be repaid once when due. For common reserve funds loans with a term of more than a year, both the principal and interest shall be repaid in monthly installments. Borrowers who repay the loan in monthly installments may choose to make an equal amount of payment each month toward the repayment of both principal and interest, or repay an equal part of the principal each month plus interest, or in any other way acceptable to the Municipal Common Reserve Funds Center. Chapter III Signing and Performance of Loan Contracts Article 13 Submission of Loan Application The borrower shall apply to the Municipal Common Reserve Funds Center for loans, fill in the application form and provide the following documents: 1. Identification Card of the borrower and a certificate proving his/her permanent residence in the cities or towns of this Municipality; 2. House purchase contract. The Municipal Common Reserve Funds Center shall accept loan applications that are complete with all necessary documents. Article 14 Examination and Approval of Loan Application The Municipal Common Reserve Funds Center shall, within 15 days of receiving the loan application, make a decision in the order of applications, and inform the applicants of the decision in the written form. When the amount of loan applied for exceeds the planned quota of loans for the current year, the Municipal Common Reserve Funds Center shall permit the applicants to go through preliminary application procedures. When the loans of the coming year are available, the Municipal Common Reserve Funds Center shall, in the order of the preliminary applications, give priority to those who have gone through preliminary application procedures in approving the loans. Article 15 Loan Procedures The borrower may, within the time limit prescribed by the written approval for loans, choose any of the commercial banks commissioned to transact common reserve funds loans to complete loan procedures. When the borrower goes to a commissioned commercial bank to complete the loan procedures, he/she shall produce the written approval for loans. Article 16 Signing of Loan Contract and Its Chief Items The commissioned bank shall sign a written contract with the borrower for the common reserve funds loan. A common reserve funds loan contract shall include the following items: 1. Name and address of the borrower; 2. Name and address of the lender, the commissioned bank; 3. Amount, term and interest rate of the loan; 4. Time of payment of the loaned money; 5. Mode of repayment of the loan and the method of calculating the monthly amount of repayment; 6. Manner and scope of guarantee; 7. Liabilities for breach of contract; and 8. Other items of agreement as demanded by the parties to the loan. A model contract form for common reserve funds loans shall be made up by the Municipal Common Reserve Funds Center for the parties to refer to. Article 17 Payment of the Loaned Money The commissioned bank shall, at the time and in the amount agreed on in the loan contract, pay the loaned money to the seller of the house by a transfer of the account. Article 18 Mode of Repayment of the Principal and Interest on the Loan In addition to cash payment, the borrower may draw on the balance of his/her common reserve funds account for the repayment of the loan. When the balance in his/her account is not enough for the repayment, he may draw on the balance of the common reserve funds accounts of his spouse, the members of the household and his/her lineal blood relations who do not live in the same household on condition that he/she obtains the approval of the holder of the account. Borrowers who need to draw on the balance of his/her common reserve funds account shall apply to the Municipal Common Reserve Funds Center and, upon approval, the arrangement shall be written into the loan contract. The withdrawal of money from the common reserve funds account shall be done by the commissioned bank in the manner of a transfer of the account. The procedures of application and approval for withdrawal of money from the balance of common reserve funds accounts may be completed together with application and approval of the loan or may be completed during the time of repayment of loan. The lineal blood relationship between the borrower and persons who do not live in the same household shall be notarized by a notary public. Article 19 Repayment of the Principal and Interest of Loans Ahead of Time With the approval of the lender, the borrower may repay part or all of the principal and interest of the loan ahead of time. If the borrower repays all of the loan ahead of time, he/she shall repay the balance of the principal of the loan and the commissioned bank will no longer charge interest on the loan, nor will it refund the interest already charged in accordance with the loan contract. If the borrower repay part of the loan ahead of time, the commissioned bank shall alter the loan contract with the borrower in the written form, and the commissioned bank shall recalculate the amount of monthly repayment during the remaining term of the loan in accordance with the term of the altered loan, the interest rate of similar common reserve funds loan on the day of advanced repayment and the balance of the principal of the loan. The term of the altered loan shall not be longer than the original one. Article 20 Continued Performance of Loan Contract In case the borrower dies or is declared missing, or loses capability of discharging civil affairs, the inheritor to his/her property, the person to whom his/her property is bequeathed or the trustee of his/her property shall continue to perform the loan contract except when the heir gives up the right to inherit or when the person to whom the property is bequeathed gives up the bequest. Chapter IV Legal Liability Article 21 Liability for Failure to Deliver the Loan in Accordance with the Contract The commissioned bank that fails to deliver the loan at the time and in the amount agreed on in the loan contract and causes losses to the borrower shall make compensations to the latter. Article 22 Liability for Failure to Make Repayment When Due The borrower who fails to repay the loan within the time limit as prescribed in the loan contract shall pay interest on overdue loans in accordance with the terms agreed on in the contract or the relevant regulations of the State. Article 23 Solution to Contract Disputes Parties to the loan contract may settle their disputes through consultation. In case the parties are unwilling to settle their disputes through consultation or their consultation fails, they may apply to arbitration organs for arbitration in accordance with agreements on arbitration. In case no agreements on arbitration are signed or such agreements are invalid, the parties may take legal action at a people' s court. Article 24 Solution to Disputes about Approval of Loan If the applicant for a loan does not accept as final the decision that the loan is not available given by the Municipal Common Reserve Funds Center, he/she may apply to the Shanghai Housing Committee for review or take legal action at a people' s court in accordance with the relevant provisions of administrative review and administrative procedure laws. Chapter V Supplementary Provisions Article 25 Procedures for Loans for Building, Renovation or Major Repair of Houses by Employees Procedures for common reserve funds loans for employees to build, renovate or carry out major repair of their own houses shall be formulated separately by the Municipal People' s Government. Article 26 Date of Implementation These Procedures shall become effective on October 1, 1999. |
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