Taiwan FSC Exempts New Youth Housing Loans From Article 72-2 Cap, Boosting State-Owned Banks' Mortgage Capacity

Article 72-2 of Taiwan's Banking Act caps banks' residential and commercial construction lending at 30% of the combined balance of deposits and bank debentures issued. The New Youth Housing Loan program is a Ministry of Finance-backed policy mortgage for first-time homebuyers purchasing homes for their own use. Including these loans under the cap could force state-owned banks facing limited headroom to reduce loan approvals and disbursements.

Financial Supervisory Commission data showed that state-owned banks added more than NT$100 billion in mortgage lending capacity in the five months through the end of January 2026 after New Youth Housing Loans were exempted from the Article 72-2 cap in September 2025. The FSC said the revised program is expected to retain the exemption to maintain funding for first-time buyers and owner-occupied homes.