Housing Loan Guideline
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Housing Loan GuidelineHousing loan program is going to be ceased on August 1st, 2003. To help our employees’ transition during the program change, the window period for continued housing loan is provided during Feb. 1st. 2003 till July 31, 2003.Application Criteria:a.The applicant must have worked for the company for at least 2 years.b.The applicant is not in the PIR categoryc.The applicant must be the one who sign the Housing Purchase Contract. Processa.The applicant fills in company loan application form with direct mgr. andHR’s approvalb.The applicant signs loan agreement with company and mortgage agreementc. The applicant fills in payment request and get HR’s approvalLiabilityEmployee should repay 100% company loan to the company within 10 years based on the mortgage agreement or upon termination of employment. Should the employee fail to repay the loan to the company under any circumstances, the company will collect the loan by executing the mortgage right on the property.Repayment sequence:Repayment sequence will follow the priority of bank loan and company loan at the same time, cash loan the last .Regular RepaymentEmployee is required to repay to the company per month from the next month of taking up the loan, and the rule is based on the repayment sequence.The repayment amount is different depends on whether employees borrowed the commercial loan:1.Employee with the commercial loan,Monthly repayment amount = loan amount/loan periodFor example: if loan amount is 130,000, the loan period is 10 years,Monthly repayment amount = 130,000/120= 1083This amount is deducted from the employees monthly after tax income. At same time, employees housing fund full amount will be transferred to employeespersonal account per the process of Beijing municipal housing fund center.Upon Employee complete the commercial loan repayment during the 10years of company loan, apply the same rule for the employees without the commercial loan from the next month of the completion of commercial loan.2.Employee without the commercial housing loan, the repayment amount iswhichever is higher:pany loan amount / loan periodFor example: the loan amount is RMB 130,000, loan period is 10 years, so each month the repayment amount is:RMB 130,000/120=1083b.Housing fund amount (40% of TCT, include employer contribution andemployee contribution):For example, If an employee’s TCT is RMB 4000,The housing fund amount is RMB 4000*40%= 1600As RMB 1600>RMB 1083,The repayment amount is RMB 1600 till the completion of the fund.Changes apply to the repayment amount if the housing fund amount changed. Incentives for early return of the loan to employees who take up the loan on or before Jan. 31, 20031.Eligibility:a.Employee who take up the loan on or before Jan. 31, 2003b.Employee who is not yet complete the loan repayment within theagreed loan period2.Incentive period: Feb. 1st , 2003 – Jan. 31st, 20053.Incentive amount:Your incentive amount= outstanding company loan amount * 1% *outstanding year (actuarial to month)For example: an employee outstanding loan amount RMB 130,000, loanperiod is 8 years, outstanding year to the completion date is 6 year and 3months,So, the incentive amount = 130,000 * 1% *6 ³/12= RMB 8125Please note: the incentive amount is taxable income. Company will withhold the individual tax for employee upon the payout.Employees Take Up the housing loan on and before Jan. 31, 2003 apply the following rules:Company can provide regular employee one-time interest-free housing loan ofRMB130,000 up to 10 years repayment term to help employee purchase commercial House.Application Criteria:a.The applicant must has worked for the company for at least 2 yearsb.The applicant who is not in the PIR category is eligiblec.The applicant must be the one who sign the Housing Purchase ContractProcessa.The applicant fills in company loan application form with direct mgr. and HR’sapprovalb.The applicant signs loan agreement with company and mortgage agreementc.The applicant fills in payment request and get HR’s approvalLiabilityEmployee should repay 100% company loan to the company within 10 years based on the mortgage agreement or upon termination of employment. Should the employee fail to repay the loan to the company under any circumstances, the company will collect the loan by executing the mortgage right on the property.Repayment sequenceEmployee's housing fund will be wholly deducted every month for the repayment of loan. Repayment sequence will follow the priority of bank loan the first, company loan the second, and cash loan the third.Special noteIf married couple both work for the company, they are entitled to enjoy, separately, the housing loan benefits offered by company, eg:a.If the Housing Purchase Contract signed by one person, the company housingloan can only be offered to the signing employee at maximum RMB130,000.b.If the Housing Purchase Contract signed by the couple, then they can apply thehosing loan jointly, and the maximum loan will be RMB260,000. However, in this case, the couple must take a joint liability to repay company loan.。
