Recently, it was learned from the National Financial Regulatory Administration and the Ministry of Housing and Urban-Rural Development that the two departments have jointly issued the "Notice on Further Leveraging the Role of the Urban Real Estate Financing Coordination Mechanism to Meet the Reasonable Financing Needs of Real Estate Projects" (hereinafter referred to as the "Notice"). This is the second joint document issued by the two departments targeting the coordination mechanism, following their January notice requiring the establishment of urban real estate financing coordination mechanisms (hereinafter referred to as "urban coordination mechanisms"). It puts forward a number of operable and implementable measures to optimize and improve the urban coordination mechanism, committed to enhancing the efficiency and quality of project referrals, supporting the reasonable financing needs of real estate projects more precisely, and promoting the steady and healthy development of the real estate market.

　　The Notice mainly covers the following content:

Improving the urban coordination mechanism. The Notice specifies that the people's governments of all provinces (autonomous regions and municipalities directly under the Central Government) shall guide cities at the prefecture level and above to improve the coordination mechanism, with the principal responsible official of the city government serving as the group leader, the responsible officials in charge of housing and urban-rural development and financial work serving as deputy group leaders, and relevant departments and financial institutions as member units.

Giving full play to the positive role of local governments. The Notice requires urban coordination mechanisms to be responsible for strictly controlling the access threshold for "whitelist" projects. The "whitelist" is a list of compliant projects, and projects must meet five conditions and five standards. Urban coordination mechanisms shall be responsible for compiling information on real estate projects under construction within their jurisdictions, reviewing and referring "whitelist" projects, rectifying problematic projects, supervising project management, and providing basic guarantees for project financing services.

Implementing referral and feedback management for "whitelist" projects. The Notice proposes that urban coordination mechanisms shall organize member units to review projects; after review, projects meeting the five conditions and five standards shall form a "whitelist" and be referred to the lead banks. Lead banks shall conduct credit reviews of "whitelist" projects and actively support projects that meet loan conditions. For projects that temporarily do not meet loan conditions, specific issues shall be listed and promptly fed back to the urban coordination mechanism. The urban coordination mechanism shall promptly propose targeted solutions, and after the relevant issues are resolved, the projects may be reviewed again and referred once more.

Actively meeting the reasonable financing needs of "whitelist" projects, granting loans to all eligible projects as required. The Notice requires financial institutions to assess the financing needs of "whitelist" projects in accordance with market-based and law-based principles, conducting independent reviews and making independent decisions. It specifies that one lead bank shall be designated for each project to be responsible for the project's subsequent financing, and the lead bank shall establish a green channel and may set aside a separate credit line. Financial institutions shall formulate specific implementation rules for due diligence exemption in accordance with the Notice.

Clarifying relevant safeguard measures. The Notice specifies that urban coordination mechanisms shall promote separate account accounting and closed-operation management for "whitelist" projects, and strictly prohibit the diversion of project funds for other purposes. Urban coordination mechanisms shall optimize the management of pre-sale funds and reasonably determine the supervision quota for pre-sale funds. Where the bank opening the pre-sale fund supervision account is inconsistent with the lead bank, the urban coordination mechanism shall assist in completing the change. Urban coordination mechanisms shall strengthen the refined management of mortgages on projects under construction, releasing the mortgage unit by unit according to the project's sales progress, so as to safeguard the security of bank claims.

It is reported that the two departments have jointly established a dedicated working group, and provinces and cities will also establish corresponding working groups. In the next step, they will continue to promote the implementation and effectiveness of the urban coordination mechanism, fully support the financing and construction delivery of real estate projects under construction, effectively safeguard the legitimate rights and interests of homebuyers, and advance the high-quality development of real estate.