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China Said to Plan Crackdown on Loans for Home Down-Payments

  • Central bank, regulators said to scrutinize property risks
  • Regulators said to target lenders including P2Ps, developers
An apartment complex in Tianjin. Chinese regulators plan to introduce rules that will bar lenders including developers, housing agencies, small-loan companies and peer-to-peer networks from offering loans for down-payments.

An apartment complex in Tianjin. Chinese regulators plan to introduce rules that will bar lenders including developers, housing agencies, small-loan companies and peer-to-peer networks from offering loans for down-payments.

Photographer: Greg Baker/AFP via Getty Images
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Chinese regulators plan to impose new rules to end the practice of homebuyers taking out loans to cover down-payments, as they step up scrutiny of financing risk in the property market, according to people familiar with the matter.

The rules will bar lenders including developers, housing agencies, small-loan companies and peer-to-peer networks from offering loans for down-payments, said the people, who asked not to be named because the matter isn’t yet public. Regulators including the central bank and the China Banking Regulatory Commission will also ask commercial banks to scrutinize mortgage applications and reject those where down-payments come from loans offered by such institutions, the people said.