BEIJING -- The Ministry of Housing and Urban-Rural Development announced Friday that it is in favor of re-adjustment of mortgage lending-related policies and measures regarding the identification of first-home buyers.

The ministry said that this was in accordance with a circular that was recently jointly issued by the ministry, together with the People's Bank of China, China's central bank, and the National Financial Regulatory Administration.

According to the circular, a household whose family members do not own a house at a certain locality, should be deemed a first-home buyer when applying for a mortgage loan from a bank.

The housing ministry, however, indicated that the new policy only provides an option for cities, which means cities can either adopt it or not adopt it, based on their own choices.

The ministry added that this policy will enable more home buyers to enjoy reduced down payment ratios and lowered mortgage lending rates, help reduce house purchase costs for residents, and better meet the rigid housing demand and needs of those who wish to improve their housing conditions through a property sale and repurchase process.

Previously, home buyer classification was based on the identification of either mortgage loan usage or ownership of a house. To put it simply, in the past a home buyer would have been seen as a second-home buyer if he/she had a record of mortgage loan usage or previous house ownership. For second-home buyers, higher downpayment ratios and higher lending rates are applied compared to first-home buyers.