The Financial Supervisory Commission (FSC) announced that applications for the youth preferential loan program will no longer count toward the lending cap under the Banking Act, ensuring banks cannot reject applicants by citing “no remaining quota.” The change is meant to guarantee funds go directly to first-time homebuyers.

Launched in August 2023, the “Preferential Housing Loans for the Youth” offers lower interest rates and higher loan ceilings. By the end of July, nearly 130,000 households had purchased homes through the program. Yet under Article 72 of the Banking Act, banks’ total residential and corporate construction loans cannot exceed 30 percent of their deposits and issued bonds. This cap pushed some state-owned banks near the limit, preventing qualified applicants from securing loans.

To address the issue, the Cabinet on Thursday ruled that, starting September 1, new youth loan cases will no longer be included in the 30 percent ceiling under Article 72-2. Banks are also barred from citing quota shortages or requiring borrowers to buy insurance or other financial products.

FSC Banking Bureau Director Tong Chen-chang (童政彰) said the program has already generated NT$990 billion (US$30.5 billion) in lending, with borrowers under 39 making up more than 70 percent. Central Bank Director General Hsieh Feng-ying (謝鳳瑛) stressed the loans are aimed at genuine housing demand and urban renewal, not speculation.