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Real Estate Business Loans


 

Introduction

Real Estate Business Loans usually refer to the loans which are issued by banks to real estate development and operating enterprises or the loans issued by land reserve organizations for real estate development and operating activities.

Category

 

Features

1. Policy-directed. Real estate industry, with strong industry linkage, plays an important role in the development of the national economy, and is easy to trigger speculation. Whether it pulls economy growth, or prevents the economy from overheating, every country's overall economic regulations have always been focused on the macro-control on the real estate industry. Given the importance of real estate loans, the banking supervision departments of China make regulations on interest rate, term, the portion of own funds, the conditions needed for the development projects, and way of guarantee for the real estate loans issued by the bank, and adjust them from time to time according to the economic development.

2. Regionality. The fixity of real estate locations determines the regionality of real estate market. Real estate prices, supply and demand in different regions are quite different, so the banks are required to implement different real estate loans intensity and loan portfolios control for different areas, ask for different collateral rates and ratio of own funds.

3. Illiquidity. At present, China's banking regulatory department prohibits the issuance of real estate working capital loans.

Term

Most of the real estate loans are medium and long-term loans.

Interest Rate

Generally with floating interest rates, and agreed in the contract in accordance with the relevant loan interest rate policy of the People's Bank of China and the loan interest rate regulations of our bank.

Charges

All kinds of fees charged by the real estate loans are agreed upon contract.

Target Customers

1. For land reserve loans: agencies or enterprises commissioned by the government competent departments and be responsible for land requisition, acquisition, consolidation, storage and transfer.

2. For housing development loans: real estate development enterprises that develop and construct economical housing for market rental and sale or various grades of commercial residential housing.

3. For commercial house development loans: real estate development companies that develop and construct office buildings, shopping malls, shops and other commercial housing used for commercial and business activities and for market rental and sale.

Application Qualifications

Applying for land reserve loans must meet the following conditions:

1. Has got the enterprises (institutions) legal person qualification, has obtained business license in the relevant departments and gone through the annual inspection procedures;

2. The local government has established a land reserve management system, which can achieve monopoly and management of the primary land market with united requisition, acquisition and transactions; local industry's market behaviors such as land acquisition, reserve, lease, real estate assessment are relatively standardized;

3. The engaged land acquisition, reserve, transfer and other business activities are in line with national and local laws, regulations and policies, and have a relatively perfect work rules and regulations and financial management system;

4. With certain capital, certain ability to resist risks, can extract certain percentage of retained earnings from the land transfer earnings or have other means to complement capital;

5. The overall planning and annual use plan of the applied loan for proposed acquisition, requisition, reserve of the land have been basically clear;

6. Has got valid loan card issued by the local People's Bank of China;

7. The applied loan should correspond to specific land, land reserve loans should implement security guarantee and other necessary means of guarantee, loan amount shall not exceed 70% of the appraised value of the acquired land, the longest loaning period should not be more than 2 years;

8. Need to open a deposit account in the Bank of China, and already made certain amounts of deposits and settlement business.

Applying for housing loans or commercial house development loans must meet the following conditions:

1. Real estate development enterprises that are established with the approval of the state administrative departments for real estate, registered with the industrial and commercial administrative authorities, obtained business license and passed the annual inspection, obtained the real estate development company qualification certificates issued by the industry competent authorities;

2. Development projects are in line with their qualification level;

3. Valid loan card/certificate issued by the local People's Bank of China;

4. The loan purpose is in line with national industrial policies and relevant laws and regulations;

5. Sound business management institutions, qualified leadership and strict operating management system;

6. Good operational, financial and credit status, and the ability to repay loan principal and interest;

7. Ability to implement the way of security acceptable to the Bank of China;

8. Having a deposit account with Bank of China, and made a certain amount of deposit and settlement business;

9. The procedures and documents of the engaged project development are complete, integral, true and valid, applicants shall obtain the land use rights certificate, construction land planning license, construction project planning license, starting (execution) work permit, pay land transfer capital according to regulations and start building, and the end time of land use rights can not be earlier than that of the loans;

10. The actual function of developed projects should be consistent with planning purposes, can effectively meet the needs of the local housing market and have good market rental and sale prospects;

11 The project budget, construction plans of the developed projects should comply with national and local government relevant regulations, the project total budget investment can meet the need for supplementary budget due to the inflation and unforeseen factors before project completion;

12. The own funds of the developed projects (i.e. owners' equity) reaches 35% of the project budget total investment, and the own funds should be invested into project construction before the bank loans to be in place.

Process

1. Submit loan applications with relevant materials to the business department of the Bank of China and its branches, sub-branch banks of all levels;

2. Provide adequate security acceptable to the Bank of China (including guarantee, mortgage, pledge form);

3. Loan application should be qualified in the first instance by the business department of the local Bank of China before being accepted;

4. The local Bank of China's business sector needs to investigate the enterprise situation, and complete the internal review process;

5. After the loan applications are examined and passed, if the two sides can reach an agreement on the terms of loan contract, mortgage contract, security agreement, then the contract can be signed;

6. Go through the mortgage registration and other relevant procedures agreed in the contract;

7. After the above process is completed, you can make withdrawal requests; bank will deposit the loan funds into your account on time.

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