The Wave of Housing Fund Reforms is Coming - How Much Can You Borrow in Your City?

How much can you borrow with your housing fund to cover your mortgage

Repost | The Paper Art Class

Author | Chen Liangxian Intern Zhang Shuqing

Design | Wang Yasai

Editor | Lü Yan

These days, there is increasing call for reform of the housing fund system.

First, because after ten years, the housing fund system reform has been included again in the government work report, which emphasizes “lowering the interest rate on personal housing fund loans”; second, recent measures to relax purchase restrictions, such as support for multi-child families buying homes and increased housing fund loan limits at the local level, have reached an important milestone.

Recently, the Shanghai Municipal Housing and Urban-Rural Development Management Committee, the Municipal Housing Management Bureau, and four other departments jointly issued the “Notice on Further Optimizing and Adjusting the City’s Real Estate Policies” (hereinafter referred to as the New Policy). The new policy focuses on optimizing three areas: purchase restrictions, housing fund loans, and property taxes, supporting both rigid and improved housing needs.

A major highlight of this new policy is significantly increasing the housing fund loan limit. In addition to raising the maximum loan amount for families purchasing their first home from 1.6 million yuan to 2.4 million yuan, the policy also proposes that families with multiple children and those purchasing qualified second-tier or above new green buildings can have their maximum housing fund loan limits increased by 20% and 15%, respectively. For those meeting both conditions, the maximum loan limit can be increased by 35%, reaching up to 3.24 million yuan, ranking first nationwide.

Besides Shanghai, over the past year, several domestic cities have also increased their housing fund loan limits to varying degrees.

The Paper Art Class studio has summarized that at least 32 cities across the country have set the maximum housing fund loan amount for first-time homebuyers in dual-income families at 1.2 million yuan or more, with 8 cities reaching 1.5 million yuan.

For example, in April last year, Wuxi Housing Fund Management Center adjusted the loan limit, raising the maximum joint loan amount for couples from 1 million yuan to 1.5 million yuan, and an additional 200,000 yuan for purchasing a primary residence, making the total loan amount for first-time dual-income homebuyers reach 1.7 million yuan, the highest among cities before Shanghai’s new policy.

According to statistics cited by the 21st Century Business Herald from the China Index Academy, by 2025, about 280 policies related to housing fund loan optimization have been introduced nationwide, making it the most frequent type of real estate policy. Main measures include increasing loan limits, adjusting the criteria for multiple loans, optimizing “commercial to public” conversions, and expanding the scope of housing fund withdrawals.

Why are so many cities increasing housing fund loan limits?

According to the “National Housing Provident Fund 2024 Annual Report” released by the Ministry of Housing and Urban-Rural Development and other departments, by the end of 2024, the total accumulated housing fund deposits nationwide reached 32.7941 trillion yuan, with a balance of 10.9253 trillion yuan, an 8.61% year-on-year increase.

The People’s Daily commentary titled “What signals does the central government’s ‘naming’ of the housing fund send?” notes that “In 2016, the nationwide housing fund deposit balance was 4.56 trillion yuan; by the end of 2024, it had grown to 10.9 trillion yuan, more than doubling. With such a large amount of money sitting in accounts, there is room for improved efficiency, which indeed calls for reform.”

The reason for this situation, according to Li Yujia, chief researcher at the Guangdong Urban Planning Institute Housing Policy Research Center, is partly due to regional differences in housing fund contribution limits: some hot cities have higher contribution limits, but housing prices are also high, limiting the effectiveness of housing fund loans.

Taking Shanghai as an example, a 90-square-meter second-hand house priced at 4.5 million yuan, before the new policy, a dual-income family purchasing their first home without additional conditions could only borrow up to 36% of the house price via the housing fund, now it can reach 53%, second only to Guangzhou among first-tier cities.

Wuzewai, a special researcher at the China Merchants Bank, analyzed to China Business Journal that compared to other cities, Shanghai’s adjustment pace and strength in the new housing fund policy send a clear signal: first-tier cities are shifting from “ensuring rigid demand” to “promoting improvement,” with policy tools moving from piecemeal repairs to systematic integration. The significant increase of the first-time housing fund loan limit from 1.6 million yuan to 2.4 million yuan, combined with factors like multiple children and green buildings, allowing a maximum of 3.24 million yuan, directly addresses the payment challenges of improving demand amid high housing prices in Shanghai.

As one of the earliest cities to implement the housing fund system in China, Shanghai piloted the system in 1991, using “individual savings and employer contributions” to address the initial capital shortage during the commercialization of housing. The Shanghai experience was quickly adopted by many cities, and by the end of 1993, 131 cities nationwide had established housing fund systems.

Now, over 30 years later, under the background of “deepening housing fund system reform,” Shanghai has introduced a targeted “combo” policy that precisely fits the real estate market. This may also indicate that in the future, the housing fund will play a greater role in expanding domestic demand.

Original title | “Shanghai Housing Fund Loan Family Limit Up to 3.24 Million, How Much Can Other Places Borrow?”