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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
citizens.
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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
adjustments.
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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.
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4..Effective Period for the Preferential Loan Program: From August 14, 2000 to
September 21, 2008.
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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
percent.
(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
method.
(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."
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[Related Circulars]
[Authorized Circulars]
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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.
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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.
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8.The credit risks involved in the Preferential Loan Program shall be borne by
the lending financial institution.
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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.
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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
following:
(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.
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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.
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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.
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