The Ministry of Housing and Urban-Rural Development has made it clear that local governments should study the "list" of real estate projects and accurately support reasonable financing needs.

The Ministry of Housing and Urban-Rural Development has made it clear that local governments should study the "list" of real estate projects and accurately support reasonable financing needs.

After the two ministries and commissions issued a document clarifying that "the coordination mechanism of real estate financing should be established in cities across the country", the Ministry of Housing and Urban-Rural Development held a meeting on the 26th to clearly speed up the implementation of the aforementioned coordination mechanism. All localities, taking projects as the object, promptly studied and put forward a list of real estate projects that can be given financing support, and established an information platform for urban real estate financing coordination mechanism projects at the national level.
On the morning of 26th, the Ministry of Housing and Urban-Rural Development held a deployment meeting for the coordination mechanism of urban real estate financing. Relevant responsible comrades of housing and urban-rural construction departments (commissions) of various provinces (autonomous regions and municipalities) and responsible comrades in charge of people’s governments of 35 key cities attended the meeting. Ni Hong, Minister of Housing and Urban-Rural Development, made it clear at the meeting that accelerating the coordination mechanism of urban real estate financing is effective, supporting the development and construction of real estate projects, meeting the reasonable financing needs of real estate enterprises with different ownership equally, and promoting the stable and healthy development of the real estate market.
In early January, the Ministry of Housing and Urban-Rural Development and the General Administration of Financial Supervision jointly issued the "Notice on Establishing a Coordination Mechanism for Urban Real Estate Financing". According to the notice, the coordination mechanism of urban real estate financing is established by cities at or above the local level, with the responsible comrades of the city government in charge of housing and urban-rural construction as the team leader, and the local housing and urban-rural construction departments and the agencies dispatched by the General Administration of Financial Supervision as the member units.
According to the development and construction of real estate projects and the qualifications, credit and finance of project development enterprises, the coordination mechanism puts forward a list of real estate projects that can be given financing support in accordance with the principle of fairness and justice, and pushes it to financial institutions within their respective administrative areas. Financial institutions evaluate the supporting objects pushed by the coordination mechanism according to the principles of marketization and rule of law.
Different from the previous white list of housing enterprises, the innovation of coordination mechanism lies in that the object of financing support is projects rather than enterprises. According to the aforementioned notice, financial institutions should not blindly lend, cut off or suppress loans for projects that encounter temporary difficulties in development and construction, but should support them by extending existing loans, adjusting repayment arrangements and adding new loans.
At that time, Chai Qiang, president of China Real Estate Appraiser and Real Estate Brokers Association, publicly stated that the debt risk of real estate enterprise groups does not mean that all its real estate projects are risky. Providing financing support with the project as the carrier avoids financial institutions from "one size fits all" all projects of debt default housing enterprises.
The meeting further emphasized that the orderly development and construction of the project is the basis for the stable and healthy operation of the real estate market and is related to the vital interests of the people. In view of the current financing problems of some real estate projects, all localities should focus on projects, study and put forward a list of real estate projects that can be given financing support, coordinate the issuance of loans by financial institutions within their respective administrative regions, and accurately and effectively support reasonable financing needs.
"Loans are the relationship between banks and housing enterprises. After the establishment of the financial coordination mechanism, the government can bridge the gap in the middle, establish a platform for dialogue and exchange, and better coordinate and solve the difficulties and problems existing in real estate financing. " Feng Bo, vice president of Chengdu Urban Construction and Development Research Institute, told the First Financial Reporter.
Feng Bo said that although some financial institutions have established some white list systems before, some financial institutions may confuse the debt risk of real estate group companies with the development and operation risk of project companies because they may not have a comprehensive and accurate grasp of the project development risks and operation risks of development enterprises.
"Bank credit approval should fully consider the business level, mortgage guarantee, repayment ability and other related risk factors. If there is a big risk, it will take hedging measures. Because project loans are often large, once they are formed, they will have a certain impact on the bank’s operating indicators and all aspects of loan management. " An industry insider told reporters.
However, Feng Bo also suggested that under the new coordination mechanism, the city government will take the lead in coordinating and guiding the financial institutions within their respective administrative areas to connect with real estate projects within their respective administrative areas, which will enhance the accuracy, continuity and coordination of real estate financial support policies, which will help to reverse the current hedging behavior of some bank financial institutions against real estate enterprises, more accurately support and better meet the reasonable financing needs of real estate projects, and effectively safeguard the legitimate rights and interests of buyers.
The meeting also made it clear that the role of "people’s governments in cities at or above the prefecture level" is to take the lead in coordination, quickly establish and operate this important mechanism, timely judge the local real estate market situation and real estate financing needs, strengthen overall planning, refine policies and measures, and build a communication platform between government, banks and enterprises.
Although both the new real estate model and the new coordination mechanism emphasize the full autonomy of urban real estate regulation and control, there are also people in the industry who are worried about the different auditing standards, progress and supervision standards for the white list of projects.
The meeting put forward detailed requirements from the regulatory level: credit funds should be guaranteed to be closed and used in compliance, and misappropriation should be resolutely prevented. At the provincial level, it is necessary to track and monitor the implementation and strengthen supervision and guidance. At the national level, an information platform for urban real estate financing coordination mechanism projects will be established, and weekly scheduling and monthly notification will be implemented.
It is worth noting that at the press conference of the State Council Office held on the 25th, Xiao Yuanqi, deputy director of the State Financial Supervision and Administration, also said that accelerating the coordination mechanism of urban real estate financing was effective.
Li Yujia, chief researcher of Guangdong Housing Policy Research Center, said that the financing coordination mechanism is an important guarantee for the real estate support policy to take effect. In the next step, the financial management department should promote the reengineering of the business system and risk control system of financial institutions, and the real estate management department should do a good job in the integrity management and compliance of business management of real estate enterprises.
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