Title:
Regulations Governing the Extension of Mortgage Loans by Financial Institutions
Inactive Regulations
Announced Date:June 24, 2010
Date:June 13, 2024(effective on June 14, 2024)
(Basis)
(Definitions)
2. The terms used in the Regulations shall be defined as follows:
(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)“Mortgage loans” shall include housing loans, land loans, unsold housing unit loans and idle industrial land mortgage loans.
(3)“Housing loans” shall include high-value housing loans and home loans.
(4)“High-value housing loans”shall mean mortgage loans extended by financial institutions to borrowers for purchasing houses (including the allotted land) of any of the following types where the building ownership certificates thereof contains the word zhu (住,“residential”):
a. Located in Taipei City with an appraised value or purchase price of NT$70 million or more;
b. Located in New Taipei City with an appraised value or purchase price of NT$60 million or more; or
c. Located in a domestic area other than Taipei City and New Taipei City with an appraised value or purchase price of NT$40 million or more.
(5)“Home loans” shall mean mortgage loans extended by financial institutions to borrowers for purchasing non-high-value houses (including the allotted land) where the building ownership certificates thereof contain word zhu (住, “residential”).
(6)“Land loans” shall mean mortgage loans extended by financial institutions to borrowers for purchasing land lots in a residential or commercial district demarcated in urban plans.
(7)“Unsold housing unit loans” shall mean mortgage loans extended by financial institutions to developers and secured by newly built unsold housing units (land allotments included).
(8)“Idle industrial land mortgage loans” shall mean mortgage loans extended by financial institutions to borrowers and secured by idle land in industrial districts.
(9)“Developers” shall mean entities engaging in real estate development activities, namely the investment and construction of real estate including land, buildings, and other structures, for sale purposes; or entities engaging in the construction of residential buildings in the building construction industry.
(10)“Newly built unsold housing units (including the allotted land)” shall mean houses (including the allotted land) built less than five years ago and maintaining the first registration of building ownership.
(11) “Idle industrial land” shall mean land listed on the Announced Inventory of Idle Land in Industrial Parks under the Jurisdiction of the Ministry of Economic Affairs as inquired by financial institutions of the Joint Credit Information Center (“JCIC”).
(12) “Specific areas” shall include Taipei City, New Taipei City, Taoyuan City, Taichung City, Tainan City, Kaohsiung City, Hsinchu County, and Hsinchu City.
(13)“Borrowers” shall mean natural persons or corporations.
(Restrictions on housing loans extended to corporations)
3. Housing loans extended by a financial institution to a corporation shall be subject to the following restrictions:
(1) No grace period.
(2) The maximum loan amount may not exceed 40 percent of the appraised value or purchase price of the house (including the allotted land), whichever is lower.
(3) The loan amount in the preceding Subparagraph may not be increased by reason of home renovation, working funds, or other purposes.
(Restrictions on housing loans extended to natural persons)
4. Housing loans extended by a financial institution to natural persons shall be subject to the following provisions:
(1)High-value housing loans: The restrictions set forth in the Subparagraphs of the preceding Article shall apply.
(2)Home loans: The financial institution shall inquire the JCIC about the applicant’s current status of housing loan history to determine whether the applicant has any outstanding secured loan backed by a house (including the allotted land) as collateral and of which the purpose is classified as “1” (for real estate purchases) , and the new home loan shall be subject to the following restrictions:
a.For a natural person who already has one housing loan: Subparagraph 1 and Subparagraph 3 of the preceding Article shall apply to a home loan for purchasing a house located in a specific area, and in addition, the maximum loan amount may not exceed 60 percent of the appraised value or purchase price of the house (including the allotted land), whichever is lower.
b. For a natural person who already has two housing loans or more: Subparagraphs of the preceding Article shall apply.
(Restrictions on land loans)
5. Land loans extended by a financial institution shall be subject to the following restrictions:
(1)The borrower shall submit a substantive development plan for the land purchased and undertake that construction will commence within a specific time frame.
(2)The maximum loan amount may not exceed 50 percent of the acquisition cost or appraised value of the land, whichever is lower. 10 percent of the loan may not be disbursed until construction begins.
(3)The loan amount in the preceding Subparagraph may not be increased by reason of working funds or other purposes.
(Restriction on unsold housing unit loans)
(Restrictions on idle industrial land mortgage loans)
(1)The construction and/or development of the mortgaged land has begun.
(2)The borrower has submitted a substantive plan for construction and/or development for the mortgaged land and has undertaken that construction and/or development will begin within one year.
(Exceptions)
(Appraisal)
(Reporting and risk management)
(Loan cases approved prior to implementation)