The proposed mortgage corporation will buy mortgages on properties that are part of the Government's Home Ownership Scheme (HOS) in addition to private residential mortgages.
Hong Kong Monetary Authority deputy chief executive Norman Chan Tak-lam said the corporation would need another set of criteria for buying HOS mortgages because HOS properties were priced below market rates and the loan-to-value ratio was different.
HOS properties are built by the Government through the Housing Authority and sold at below market prices to the lower-income group.
Banks lend up to 90 per cent of the price of HOS properties to home-buyers, compared with 70 per cent of private residential properties, because HOS mortgages are guaranteed by the Housing Authority.
The proposed criteria allows the corporation to buy only mortgages with a loan-to-valuation ratio of 70 per cent.
Only up to 50 per cent of the household income of the home-buyer is allowed to be used to repay the mortgage loan.
Mr Chan said this might not be applicable for HOS mortgage purchases.