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

(Basis)
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.

(Definitions)
2.The terms used in these Regulations 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, ChunghwaPost Co., Ltd., and insurance companies.
　(2) "Specific areas" shall include Taipei City and 13 other 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 and Danshuei District.
　(3) "Housing loan" shall mean a mortgage extended by a financial institution 
　　　to borrowers for purchasing a house (land included) located in specific 
　　　areas where the title deed of the house contains the wording "(residential)".
　(4) "Land loan" shall mean a loan extended by a financial institution to borrowers
　　　 that is secured by land in a residential district or a commercial district 
　　　 designated under urban planning.
 (5) “Borrower” shall mean individuals and corporate body.

(Regulations on Housing Loans)
3.Before extending a housing loan to an individual, the financial institutions 
　should  make inquiry with the Joint Credit Information Center (hereinafter the 
　“JCIC”) on the loan applicant. If the loan applicant already has one or more 
　loans secured on his/her house (land including) and the secured loan has a 
　classification code of "1" (real estate purchase), the terms of the loan for 
　the applicant shall be subject to the following restrictions:
　 (1) No grace period is allowed;
　 (2) The maximum loan-to-appraised value ratio shall not exceed 60 percent.
　 (3) The loan amount mentioned in the preceding subparagraph may not be increased 
　　　 for reasons of home renovation obtaining, working fund or for any other 
　　　 purposes.

(Restrictions on housing loan to corporate body)
4. The conditions for housing loans extended by a financial institution to corporate
　 body shall be subject to the provisions set forth in the Subparagraphs of the 
　 foregoing Direction.

(Restrictions on land loans and exceptions)
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.

(Appraisal)
6. Financial institutions shall conduct the appraisal for housing loans and land 
　 loans in accordance with its internal lending rules and the provisions set forth
　 by the competent authority.

(Exemption)
7. Housing loans and land loans that have already been approved by the financial 
　 institutions but not yet disbursed prior to December 30, 2010 may be processed
　 according to the original loan terms, without being subject to the restrictions
　 under the Regulations.

(Reporting)
8. Financial institutions shall file reports on their housing loans and land loans
　 books periodically in accordance with the form set forth by the Bank.

(Application)
9. The provisions in the preceding four Directions shall apply mutatis mutandis
　 to short-term notes and bills business of bills finance companies where the 
　 issued short-term note or bill is secured by land in the residential district
　 or the commercial district designated in urban planning.