Speaking of housing provident fund, most working people are familiar with it. If you want to buy a house, housing provident fund loans are basically the first choice for most people because they have lower interest rates than commercial loans. But do you know the specifics of provident fund loans? Under what circumstances cannot provident fund loans be used? We provide you with detailed answers!

What is housing provident fund?

The housing provident fund is a long-term housing savings deposited by the unit and its employees. It is the main form of monetization, socialization and legalization of housing distribution. The housing provident fund system is an important housing social security system stipulated by national law and is mandatory, mutually supportive, and protective. Units and individual employees must fulfill their obligations to pay housing provident funds in accordance with the law. The units here include state agencies, state-owned enterprises, urban collective enterprises, foreign-invested enterprises, urban private enterprises and other urban enterprises, public institutions, private non-enterprise units, and social groups.

Process of Housing Provident Fund Regulations

In 1999, the "Housing Provident Fund Management Regulations" were promulgated to strengthen the management of housing provident funds and are applicable to the payment and deposit of housing provident funds within the territory of the People's Republic of China and the country. Extraction, use, management and supervision.

In 2002, the State Council announced the revision of the "Housing Provident Fund Management Regulations", which stipulates that the housing provident fund refers to state agencies, state-owned enterprises, urban collective enterprises, foreign-invested enterprises, urban private enterprises and other urban enterprises, institutions and their Long-term housing savings contributed by current employees.

On October 27, 2011, Qi Ji, Vice Minister of the Ministry of Housing and Urban-Rural Development, said that the Ministry of Housing and Urban-Rural Development is working with various departments to study and revise the provident fund regulations and relax the regulations on individuals withdrawing provident funds to pay housing rent.

In 2013, some cities introduced measures to allow employees with serious illnesses or their immediate family members to withdraw provident funds for emergency relief.

In 2014, Wuhan Provident Fund plans to take various measures to liberalize the withdrawal policy for low-income employees and implement differentiated deposits. Provident fund withdrawals can be made if the monthly income is less than 1,900 yuan.

Be aware of 11 situations in which the housing provident fund cannot be withdrawn

1. The employee dies or is declared dead, and his heirs and legatees apply to withdraw the balance of the employee’s housing provident fund account.

2. Purchase, build, renovate or overhaul an owned self-occupied house.

3. Repay the principal and interest of the house purchase loan.

4. Rent and live in.

5. Retired or retired (or reaching the legal retirement age).

6. Completely lose the ability to work and terminate the labor relationship with the employer.

7. Those who leave the country to settle down.

8. The labor relationship between employees who are not registered in this city and the unit is terminated.

9. Those who have moved their household registration out of this city and terminated their labor relationship with their employer.

10. Laid-off and unemployed persons, men over 45 years old (inclusive) and women over 40 years old (inclusive), who have been laid off or unemployed for more than 12 months.

11. Other circumstances specified by the Management Committee in accordance with relevant laws and regulations.

Process for provident fund mortgage loans:

1. The borrower applying for a housing provident fund loan needs to submit a written application to the Municipal Housing Provident Fund Management Center, fill in the housing provident fund loan application form and truthfully provide relevant information.

2. The Municipal Housing Provident Fund Management Center is responsible for reviewing the borrower’s qualifications, guarantor qualifications, loan amount and loan period, and filling in and agreeing to the contract. The People's Bank of China stipulates the application of insurance.

3. After the loan procedures are completed, the Municipal Housing Provident Fund Management Center will issue a loan approval notice to the bank. The bank will handle the loan transfer procedures after receiving the loan notice.

Reminder: When buying a house, the borrower can know the loan amount and monthly repayment amount by going to the bank for calculation based on his provident fund payment. According to the relevant regulations on provident fund management, withdrawals are made once a year.

(The above answer was published on 2015-06-24, please refer to the actual current relevant home purchase policies)

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