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Laws and Regulations Database of the Central Bank of the Republic of China-Article Content
1.These Directions are prescribed in accordance with the Executive Yuan’s 
 decision on August 14, 2000, August 17, 2001, April 11,2002, January 10, 
 2003, August 22, 2003, May 30, 2004 and May 20, 2005 to launch a 
 preferential housing loan program (hereinafter referred to as "the 
 Preferential Loan Program") for purposes of revitalizing domestic 
 traditional industries and reducing the housing loan interest burden of 
2.Lending financial institutions and loan allocation: To be jointly prescribed
 by the Financial Supervisory Commission, Executive Yuan and the Central Bank 
 of the Republic of China(Taiwan); the same shall also apply to subsequent 
3.Fund sources of the Preferential Loan Program: To be provided from the funds
 of the lending financial institutions; should such funds be insufficient, the
 Central Bank of the Republic of China (Taiwan)shall provide of additional funds.
4..Effective Period for the Preferential Loan Program: From August 14, 2000 to
  September 21, 2008.
5.Conditions attached to the Preferential Loan Program:
 (1)Program size: NT$1,680 billion (originally set at NT$200 billion on August
   14, 2000, then increased by NT$200 billion on August 17, 2001, April 11, 
   2002 and January 10, 2003, NT$280 billion on August 22, 2003 and NT$300 
   billion on May 30, 2004, May 20, 2005).
 (2)Lending rates: Calculated as a floating rate pegged to the Chunghwa Post 
   Co., Ltd. ’s floating interest rate on two-year time deposits plus 1 
 (3)Government subsidization at a fix rate per annum: 0.85% for the NT$400 
   billion appropriated on August 14, 2000 and August 17, 2001, 0.425% for 
   the NT$200 billion appropriated on April 11, 2002, 0.25% for the NT$200 
   billion appropriated on January 10, 2003, and the NT$280 billion 
   appropriated on August 22, 2003, and 0.125% for the NT$300 billion 
   appropriated separately on May 30, 2004 and May 20, 2005 to be budgeted 
   and paid by the Ministry of the Interior on a yearly basis.
 (4)Actual interest rate paid by the borrower: The lending rate of the 
   financial institution less the government subsidization rate.
 (5)Ceilings per household:
   (i)Maximum loan value per household in Taipei City is NT$2.5 million.
   (ii)Maximum loan value per household in other areas is NT$2 million.
 (6)Maturity and method of repayment: Maximum 20 years, including a three-year
   grace period (during which the borrower pays the interest but not the 
   principal); from the fourth year, the principal and interest shall be 
   evenly amortized for the remainder of the term to maturity by the annuity 
 (7)Prospective borrower: A Republic of China national of at least 20 years of 
   age, eligible for one housing unit only.
 (8)Applicable buildings: Used and new housing units of which the ownership 
   transfer registration has been completed on/after November 20, 2004, and on 
   the title of which the purpose of the building is registered as including 
   "residence" or "dwelling."
[Related Circulars] [Authorized Circulars]
6.If a borrower fails to repay the principal/interest for six months or longer, 
 the loan shall be listed as an overdue and non-accrual loan, and the borrower 
 shall no longer be eligible for interest subsidy. After the disposal of the 
 collateral by the lending financial institution to settle the outstanding loan 
 balance, the national treasury shall recover the interest subsidy applied for 
 the (180-day) period from the initial date of failure to make payment to the 
 payment call date. If the proceeds from disposal of the collateral fail to 
 discharge the balance of the loan owed by the borrower, the national treasury  
 will not pursue the recovery of the interest subsidy.
 Where normal repayment is resumed on an overdue account under the preceding 
 paragraph, the interest subsidy shall be reinstated from the initial day 
 normal payment is resumed.
7.Managing financial institution: A managing financial institution may be 
 selected to co-ordinate the overall accounting of interest subsidies of the 
 lending financial institutions, conduct computerized accounting audits, 
 develop operational guidelines, and design tables and forms.
 The managing financial institution shall enter into allocation and remittance 
 contracts with the lending financial institutions for the purpose of 
 administering the above-stated matters.
8.The credit risks involved in the Preferential Loan Program shall be borne by 
 the lending financial institution.
9.The Preferential Loan Program may be administered in conjunction with other 
 government home loan programs (such as loans for public housing, and labor, 
 government employee, and teacher housing), with the exception of the Low 
 Interest Rate Loan Program for Young Home Buyers and the Preferential Home 
 Loan and Credit Guarantee Program for Youth.
10.Lending financial institutions shall include the conditions prescribed in
  Directions 5, 6 and 9 in the loan agreements between the lending financial
  institutions and the borrowers. The borrower shall agree to all of the 
  (1) If a borrower applies for the Preferential Loan Program repeatedly, or
    applies for the Preferential Loan Program and the Low Interest Rate Loan
    Program for Young Home Buyers or the Preferential Home Loan and Credit
    Guarantee Program for Youth at the same time, the borrower shall no
    longer be qualified for the Preferential Loan Program. The interest due
    on amounts borrowed under the Preferential Loan Program shall, starting
    from the date of extending the loan, be calculated pursuant to the
    interest rate for general housing loans by lending financial institution.
  (2) If there is any dispute with respect to the performance of the loan
    agreement between the parties concerned, the parties agree to submit the
    dispute to the district court where the lending financial institution is
    located or other civil courts.
11.Financial institutions participating in the Preferential Loan Program shall 
  faithfully abide by regulations related to credit extension and may not grant 
  loans in bulk to construction enterprises or reserve loan quota for construction
  enterprises or real estate brokerages; in the event of a violation of these 
  provisions, the lending financial institution shall bear the interest previously 
  subsidized by the government.
12.The lending financial institution shall list the Preferential Loan Program as a 
  focal point of its internal audit. Financial examination departments shall 
  conduct ad hoc inspections of the Program as circumstances dictate, and the 
  Program shall also be listed as a focal point of ordinary business inspection.