Beijing adjusted polices of housing provident fund loans on Wednesday as part of an effort to loosen restrictions on house purchases.

Under the new rules, if a borrower, including co-applicants, does not have housing in Beijing and has no record of housing provident fund loans nationwide, provident fund loans can be used for the first house. The Beijing Housing Fund Management Center released the rule on Tuesday.

When buying one's first house in Beijing, a person can take advantage of many preferential policies, such as those involving down payments, loan rate and taxes.

Previously, even if a borrower has no house in Beijing, if he or she has had a mortgage loan anywhere in the country — even a commercial loan from a bank or a housing provident fund loan — he or she was not eligible for the first-house policy of the housing provident fund. The previous policy was seen as a way to prevent property speculation.

The notice said the change aims to meet people's demand for housing.

Housing provident fund loans are part of the social security system in China. It is paid by the employee and the employer monthly based on the employee's salary and can be used for the employee's future house purchase or rent. It has a lower interest rate than a commercial housing loan.

Under current policy, the definition of a second house in Beijing will be that the borrower either has a house in Beijing already or has no housing but has a housing provident fund loan record nationwide — or both.