2016-03-24

Central Bank Planning to Let Peasants Mortgage Farms

The plan for absorbing third- and fourth-tier inventory is to move rural residents into the cities, but as covered in several posts, there are obstacles.
Urbanization Stall: Peasants Refuse to Give Up Land Rights
Urbanization Plan Meets Reality: Cities Lack Policies, Enthusiasm; Rural Support Policies Counteract
Urbanization Logic: Must Prevent People From Moving to First-Tier
China Chooses Urbanization to Fill Empty Homes

Those obstacles include more opportunity in top-tier cities. Rural support policies make staying home attractive. Workers save cash and build a house in their hometown, where yuan go much further. It is also difficult to monetize land and rural residents don't want to sell.

The latter problem is being addressed.

iFeng: 重磅!农村土地经营权、房屋财产可抵押贷款了

Today, China's central bank released the rural "two powers" mortgage loans to pilot approaches from borrowers, loan management, risk compensation, supporting measures to support the pilot monitoring and evaluation and other aspects of financial institutions, the pilot regions and relevant departments to promote the implementation of the "two rights "mortgage pilot identified policy requirements.

"Two rights" for the right to operate the housing and property rights of rural farmers contracted land.

Approach emphasizes, banking sector financial institutions should independently determine the reasonable mortgage rates, amount, term, interest rate, simplify loan procedures, strengthen credit risk control. Require the borrower to obtain the "two powers" mortgages should be mainly used for agricultural production management and other legitimate uses of approved lenders.

...The first specification is legally secure property rights to rural migrant housing mortgage loans to pilot, effectively increase financial support for the "three rural" to protect the legitimate rights and interests of the parties lending, according to the "State Council regarding the development of rural land contract management rights and property rights of peasant housing mortgage loan pilot guidance "(Guo Fa [2015] No. 45) and the" National people's Congress Standing Committee on authorizing the State Council in Beijing's Daxing District, and other 232 pilot counties (cities, districts), Tianjin, North China and other 59 pilot counties ( city, district) administrative regions were temporarily adjust the implementation of relevant laws and regulations of the decision "and other policies to develop this approach.

The second term of the property rights of farmers housing mortgage loan means lower without changing the nature of the ownership of the homestead premise, farmers housing ownership and use rights as collateral homestead occupied by banking institutions (hereinafter referred to as the lender ) to eligible farmers homeowners (hereinafter referred to as the borrower) issued within the agreed period of repayment of the loan.

The third term of the pilot area is referred to as "the Standing Committee of the National People's Congress on Authorizing the State Council in Beijing's Daxing District, and other 232 pilot counties (cities, districts), Tianjin, North China and other 59 pilot counties (cities, districts) administrative regions are temporarily adjust the implementation of relevant laws and regulations of the decision "clearly mandated farmers housing property mortgages pilot counties (cities, districts).

List of pilot areas for housing mortgages. Some of these are counties or districts that are part of larger urban areas.

List of pilot areas for land mortgages:

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