The infrastructure minister plans to reduce the number of houses that are covered by loans from Government Housing Loan Corp. by 10 percent in fiscal 2002 from the current fiscal year to around 500,000 units, ministry sources said Thursday.

The Land, Infrastructure and Transport Ministry also plans to cut the amount of extra loans to be added to basic loans by half and confine the amount of loans to high-income buyers to 50 percent of the housing prices as part of reform of the public lending organ, according to the sources.

The ministry aims to shrink the scale of loans by the quasi-governmental financial institution so it will promote cofinancing with private financial institutions, the sources said.

It will include these policies in its budget requests for fiscal 2002, which starts on April 1, according to the sources. Calls are growing among political circles for the corporation to suspend extending fresh loans as it depresses commercial lenders.

The ministry has countered by citing fears that the suspension of loans by the corporation will make it difficult to provide steady funds to middle-income home buyers.

The entity has extended loans for 550,000 units in the current fiscal year, with total loans amounting to some 10.6 trillion yen. Of that amount, about 8.4 trillion yen is raised from the government’s fiscal investment and loan program.

The ministry plans to promote securitization of housing loans to expand fundraising measures instead of relying solely on the fiscal loan and investment program, the sources said.

Meanwhile, the plan to reduce the 8 million yen in extra loans, which are extended to purchasers of ready-built houses and condominiums, aims to urge borrowers to combine loans from the corporation and private financial institutions, they said.

As for borrowers with an annual income of more than 8 million yen, loans by the entity will be curbed by up to 50 percent of the purchase price to encourage them to borrow the remainder from private financial institutions, they said.

Currently, eligible consumers are allowed to purchase homes fully with loans from the corporation.

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