Regulatory Alerts2021-03-18
Added · Updated
Regulations Governing the Extension of Mortgage Loans by Financial Institutions
Amended on March 18, 2021 and effective March 19, 2021, these regulations impose loan-to-value caps and restrictions on mortgage loans extended by financial institutions. Housing loans to corporations are capped at 40 percent with no grace period, while natural persons face caps of 55 percent for first or second loans and 40 percent for third or subsequent high-value loans. Land loans are limited to 65 percent of value with a 10 percent holdback, unsold housing unit loans to 50 percent, and idle industrial land loans to 55 percent unless development has commenced. The rules do not apply to reconstruction projects under specific urban renewal acts, and loans approved prior to the effective date remain governed by the previous provisions.
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