首付贷 (shǒu fù dài): Down payment loans

With the ever-tightening control over house buying, the real estate market has cooled recently. But some real estate developers are reportedly offering under-the-table down payment loans to attract buyers, which should draw the attention of the authorities.

The use of such loans by a developer or other party so that the buyers can quickly enter the market is a violation of the current restrictions on property buying. Meanwhile, the illegal financial service of down payment loans issued by real estate developers or real estate agencies lacks necessary supervision, which has great systemic financial risk. Such down payment loans allow people with insufficient repayment ability to enter the real estate market. This is irresponsible for buyers and adds risks to the market.

As early as 2016, relevant authorities have declared that down payment loans are illegal. Seven departments including the Ministry of Housing and Urban-Rural Development, National Development and Reform Commission and the People's Bank of China have jointly issued a regulation that forbids real estate agencies and other organizations providing illegal financial products and services, including loans for the down payment on a property. The authorities and consumers should be aware of the risks posed by down payment loans.