Laws and Regulations Database of the Central Bank of the Republic of China(Taiwan)

Subject:
With respect to questions relating to financial institutions making loans under the 
“Preferential Housing Loan and Credit Guarantee Program for Youth” and the 
“NT$200 Billion Preferential Housing Loan Program”, please refer to the following 
Explanations and forward this Letter to all lending financial institutions under 
these programs for reference.

Explanations:
1.This is in response to a letter of your bank, dated September 21, 2000 (Ref. No. 
　Zong- Zhuan –4-Zi-890022165) and in accordance with a letter of the Ministry of 
　Finance, dated October 23, 2000 (Ref. No.Tai-Cai-Rong  -89757997).
2.According to Question 9 of the “Q&A for the Preferential Housing Loan and Credit 
　Guarantee Program for Youth and the NT$200 Billion Preferential Housing Loan 
　Program”, as approved by the Ministry of the Interior, the Ministry of Finance 
　and the CBC on August 31, 2000, the provision relating to “the maximum 
　amortization period shall be 20 years, including a 3-year grace period (during 
　which the borrower pays the interest but not the principal); from the fourth year 
　onward, the principal and interest shall be amortized over the remaining of the 
　term to maturity by the annuity method. If the borrower wishes to prepay the 
　principal prior to maturity, the lending financial institution cannot refuse” 
　shall be interpreted as follows: if a borrower, in consideration of fund 
　allocation or reducing financial burdens, chooses at the initial stage of the 
　loan to repay the loan by equal installments, the lending financial institution 
　cannot refuse.  On the other hand, a lending financial institution shall not 
　force a borrower to repay the principal and interests by equal installments at 
　the initial stage of the loan.
3.If a borrower under either of the above two programs deceases before the loan 
　matures and his successor assumes the outstanding loan balance, the successor is 
　entitled to the preferential interest rate thereon.
4. As to the question whether lending financial institutions under the programs may 
　concurrently offer two ways, one lump sum or annual payments, of collecting 
　guanrantee fees from their customers, CBC advised that fee collection method of 
　each financial institution should be consistent in order to simplify the bank’s 
　account operations, and to avoid unneccessory complications and errors in 
　processing loans under the Small and Medium Enterprise Credit Guarantee Fund. In 
　addition, the Small and Medium Enterprise Credit Guarantee Fund has agreed to 
　assist and respond to inquiries regarding an applicant’s spouse from financial 
　institutions making loans under the Preferential Home Loan and Credit Guarantee 
　Program for Youth, if their inquiry document lists information of relating to 
　that spouse.