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

1. This Regulations are promulgated pursuant to Articles 28, 29 and 31 of The Central Bank of the Republic of China(Taiwan)Act and Paragraph 2, Article 37 and Article 40 of the Banking Act of the Republic of China.

2. The terms used in the Regulation shall have the following meanings:

(1)"Financial institutions" shall include domestic banks, branches of foreign banks in Taiwan, credit cooperatives, Agricultural Bank of Taiwan, credit departments of farmers’associations, credit departments of fishermen's associations, Chunghwa Post Co., Ltd., and insurance companies.

(2) "Housing loan" shall mean a mortgage extended by a financial institution to a borrower for purchasing a non-high-priced house (land included) where the title deed of the house contains the wording "residential."

(3) "High-priced housing loan” shall mean a mortgage extended by a financial institution to a borrower for purchasing any of the following types of house (land included) where the title deed of the house contains the wording “residential”:

a. The house is located in Taipei City with an appraised value or purchase price of NT$70 million or more;

b. The house is located in New Taipei City with an appraised value or purchase price of NT$60 million or more; or

c. The house is located in an area within Taiwan other than Taipei City and New Taipei City with an appraised value or purchase price of NT$40 million or more.

(4) "Specific areas" shall include the following administrative districts:

a. All districts in Taipei City;

b. Seventeen districts in New Taipei City covering Banciao District, Sanchong District, Jhonghe District, Yonghe District, Sinjhuang District, Xindian District, Tucheng District, Lujhou District, Shulin District, Sijhih District, Sansia District, Linkou District, Danshuei District, Wugu District, Taishan District, Bali District, and Yingge District.

c. Four districts in Taoyuan County covering Taoyuan City, Luzhou City, Zhongli City, and Guishan Township.

(5)"Home mortgage loan” shall mean housing loan and high-priced housing loan.

(6)"Land loan" shall mean a loan extended by a financial institution to a borrower and secured by land in a residential district or a commercial district designated under urban planning.

(7)"Borrower" shall mean an individual and a corporate body.

3. Home mortgage loan extended by a financial institution to a corporate body shall be subject to the following restrictions:

(1) No grace period is allowed;

(2) The maximum amount of the home mortgage loan shall not exceed 50 percent of the house’s appraised value (land included) or its purchase price, whichever is lower; and

(3) The loan amount mentioned in the preceding subparagraph shall not be increased for reasons of home renovation, working fund or other purposes.

4. Home mortgage loan extended by a financial institution to an individual shall be subject to the following provisions:

(1) High-priced housing loan: Restrictions set forth in the subparagraphs of preceding article shall apply.

(2) Housing loan: The financial institution shall make inquiry with the Joint Credit Information Center on individual applicant’s borrowing status; If the loan applicant already has one mortgage loan secured by a house (land included) and the purpose of the loan has a classification code of "1" (real estate purchase) (hereinafter "home mortgage"), the terms of the housing loan shall be as follows:

a. For an applicant who already has two or more home mortgages, provisions set forth in the subparagraphs of the preceding article shall apply.

b. For an applicant who already has one home mortgage and is now applying a housing loan for purchase of a house located in a specific area, the terms of the housing loan shall comply with Subparagraph 1 and Subparagraph 3 of the preceding article. , and the maximum amount of the loan shall not exceed 60 percent of the house’s appraised value (land included) or its purchase price, whichever is lower.

5. The conditions for land loan extended by a financial institution shall be subject to the following restrictions:

(1) The financial institution may not accept land as security for a land loan if the borrower has not submitted a concrete construction plan for the land.

(2) The maximum amount of loan shall not exceed 65 percent of the land acquisition cost or its appraised value, whichever is lower and 10 percent of the extended loan shall not be disbursed until the borrower has commenced construction.

(3) The loan amount mentioned in the preceding subparagraph may not be increased for reasons of working fund or other purposes.

The provision of holding 10 percent of the loan until the borrower has commenced construction mentioned in Subparagraph 2 of the preceding Paragraph does not apply to the following circumstances:

(1) The land is associated with an urban renewal project approved by the competent authorities; or

(2) The land is associated with a government or self-initiated land consolidation project already approved by the competent authorities but not yet completed.

If the borrower who is not involved in investing or purchasing real estate or house construction applies for a land loan as working fund for regular business operation, such loan is not subject to the restrictions set out in Paragraph 1 hereof, provided the borrower has submitted a concrete operational plan.

6. A financial institution shall conduct the appraisal for home mortgage loans and land loans in accordance with its internal lending rules and the provisions set forth by the competent authority.

When a financial institution accepts the transfers of or renewals of loans stated in the preceding paragraph, the loan amount shall not be increased through reappraising.

7. Home mortgage loans and land loans that have already been approved by a financial institution but not yet disbursed on or before June 26, 2014 may be processed according to the originally approved loan terms, provided the loan terms comply with applicable regulations at the time of approval.

8. A financial institution shall file reports on its home mortgage loans and land loans periodically in accordance with the form set forth by the Central Bank of the Republic of China (Taiwan).

A financial institution shall set out internal risk control, operating procedures and other necessary internal rules for its home mortgage loan and land loan businesses. If the lending criteria of a financial institution’s internal rules are stricter than the Regulation, the financial institution shall extend loans in accordance with its internal rules.

9. The provisions in the preceding four articles shall apply mutatis mutandis to short-term bills guaranteed by bills houses where the guarantee of issuedshort-term bills is secured by land located in the residential district or the commercial district designated in urban planning.