Qian Kaishen and his wife almost gave up on buying a bigger home in August. When apartments went on sale at Shanghai Villa, a project they liked near the city’s Hongqiao Airport, the couple couldn’t come up with the 30 percent down payment, because most of their savings were locked up in a certificate of deposit-like investment earning 5 percent a year. Then the property agency they were working with, E-House China Holdings (EJ), offered the couple a one-year, 280,000-yuan ($45,546) loan at zero interest. It covered about half the down payment and, combined with cash they had available, gave them just enough. “Now were good both on our investment and home purchase plan”, says Qian, who works for a local logistics company. “We would’ve given up if it weren’t for the loan. I don’t like borrowing from my parents or relatives, especially because we have the money”.
E-House has helped more than 70 home buyers borrow almost 20 million yuan for down payments through online finance website fangjs.com, which it set up in July with Web portal operator Sina (SINA). Investors who fund the 12-month loans typically earn 7.5 percent to 8 percent. Developers who want to boost sales subsidize interest payments, keeping rates for home buyers low, and provide guarantees or deposits to protect E-House against defaults by the borrowers. E-House collects a fee of 1percent of the loan amount from the borrower, according to Ma Weijie, its deputy chief financial officer. It caps lending for down payments at 15 percent of the price of a first home and 20 percent for a second home and lends only to owner-occupiers, not investors. China Overseas Land & Investment and Poly Real Estate Group (600048:CH) are among 22 homebuilders that have signed with E-House to provide the service at some of their projects, Ma says…….
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