Loan extensions for projects in 'white list'

Real estate development projects that have been placed on a "white list" under China's financing coordination mechanism are expected to secure extensions on their existing loans, provided they meet specific conditions and standards, said industry insiders.

The new move will provide breathing room for fundamentally sound projects caught in the market downturn. The central aim is to strike a balance between ensuring the completion of presold homes and preventing systemic financial risk, experts added.

Even as official announcements from regulators are pending, the new policy — which enables loan extensions for eligible property projects — has been confirmed by multiple sources within financial institutions as well as property developers.

Meanwhile, the municipal housing authority in Guangzhou, Guangdong province, convened a meeting with financial regulators and several major real estate developers earlier this month to discuss project financing, according to a report by Southern Metropolis Daily.

China launched the "white list" mechanism in January 2024, where financial institutions have been encouraged to provide financial support to eligible real estate projects to ensure their normal construction funding needs and expedite completion and delivery.

Approved loans for real estate projects under the "white list" mechanism have surpassed 7 trillion yuan ($1 trillion), according to data released by the Ministry of Housing and Urban-Rural Development in October.

A year-end 2025 survey by the China Index Academy found that approximately 60 percent of participating institutions reported "providing adequate collateral" as the most difficult condition to meet for entry into the crucial financing "white list".

The survey also identified other key friction points in the process.

Nearly 60 percent of respondents indicated that the final loan amount approved is closely tied to a project's sales and cash flow, while close to half pointed to complex approval procedures and slow fund disbursement as major impediments.

Currently, securing a loan extension depends heavily on the value of the collateral and additional credit enhancement arrangements, sources said.

The loan extension policy aligns with the central government's clear directive to "focus on stabilizing the real estate market". The tone was set at the Central Economic Work Conference in December, which outlined China's economic priorities for 2026.

Following the tone-setting meeting, the National Financial Regulatory Administration convened a meeting later in December, pledging to enhance the role of the financing coordination mechanism to help build a new model for property development.

Concurrently, the adjustment responds directly to the industry's debt maturity profile, analysts said.

Medium — to long-term bank loans maturing between 2024 and 2026 account for over 40 percent of developers' existing debt, said Yan Yuejin, deputy head of Shanghai-based E-House China R&D Institute.

Under previous policies, most loans could only be deferred until the end of 2026, creating a mismatch with the sector's longer adjustment cycle. The extended grace period helps smooth repayment pressures beyond 2028, Yan added.

Extending loans to projects on the real estate financing "white list" is helping commercial banks stabilize their asset quality by preventing a surge in nonperforming loans, according to an analysis by the China Index Academy.

Li Yujia, chief researcher at the residential policy research center of the Guangdong Planning Institute, said that projects admitted to the financing coordination mechanism have already passed stringent vetting.

"It means the project is compliant, has all required permits, is free of legal or debt disputes, maintains a balance sheet, and has proper capital supervision," he said. If such projects still face repayment difficulties, the root cause lies in market conditions such as sales slumps or regional oversupply — rather than fundamental flaws, he added.

In this context, Li described granting loan extensions as a "smart solution". "The core of an extension under the 'white list' mechanism isn't about forcing banks to make concessions," he said. "It is the optimal path to protect the rights and interests of both sides and achieve a win-win outcome during market pressure."

Forcing immediate repayment could trigger distress sales, destabilizing local housing prices and ultimately undermining the security of banks' claims, while a reasonable extension provides crucial breathing space, Li said.

This approach helps developers maintain operations while maximizing the bank's chances of full loan recovery in the future, Li added.