According to China's Ministry of Housing and Urban-Rural Development (MOHURD), the ministry opened a public consultation on 5 June 2026 on a revised draft of the Housing Provident Fund Management Regulations, the compulsory savings and mortgage-subsidy scheme for urban employees. Public feedback is being collected until 5 July 2026. Since the fund's establishment in 1999, the regulation has only undergone two minor amendments, in 2002 and 2019, and financial media including Sina Finance and China Daily describe the current draft as the most extensive structural rewrite since the rules were first issued.
The draft, which runs to seven chapters and 52 articles, widens the list of eligible withdrawal purposes from six to nine categories, adding home renovation up to a capped amount, payment of property management fees, and a catch-all clause for other housing consumption uses approved by the State Council. Rent payment is moved to the top of the list and the previous cap tying eligible rent withdrawals to a share of household wage income is removed. The draft also opens voluntary participation to self-employed individuals, part-time workers and other flexibly employed people, with implementation rules to be set by city governments with districts.
On financing efficiency, the draft cuts the maximum time for a housing provident fund centre to approve or reject a mortgage application from 15 working days to 10. It also revises the rate-setting mechanism in Article 6: interest rates on deposits and loans would be proposed jointly by MOHURD, the Ministry of Finance and the People's Bank of China, replacing the previous arrangement under which the central bank proposed rates after consulting the construction authority, before submission to the State Council for approval.
The draft tightens penalties for fraud: those who withdraw funds through fraud or falsified documents face a mandatory repayment order and a three-year ban from further withdrawals or loans, while fraudulently obtained mortgage loans trigger a five-year ban plus a fine of 10% to 20% of the loan amount, with severe cases added to a serious-dishonesty blacklist. Investment income from the fund, previously earmarked for low-rent housing, is redirected toward public rental housing and a new category covering whole-life-cycle building safety management.
For China's construction sector, the proposed changes to the Housing Provident Fund rules—if adopted—could provide a modest boost to the renovation and home-improvement market rather than to new-build construction. By allowing savers to withdraw funds for renovations and property-management fees for the first time, the reform unlocks existing savings and effectively lowers the cost of upgrading a home. The impact is likely to be limited, however, for several reasons. Only about a third of urban workers (roughly 176 million people in 2024) contribute to the fund at all, coverage skews heavily toward the state sector and large employers, and withdrawals remain capped and tied to renovation plans and invoices. Above all, weak housing demand in China is driven by deeper structural factors—price expectations and income uncertainty—that a single eased withdrawal rule cannot offset.