(Bloomberg) -- The People’s Bank of China will establish a nationwide program to unleash 300 billion yuan ($41.5 billion) in cheap funding to help state-owned companies buy unsold homes.

Central bank Deputy Governor Tao Ling announced the so-called relending program at a briefing in Beijing on Friday, hours after the government unveiled an unprecedented package of measures to address the nation’s protracted property crisis.

Funding will be extended to 21 providers, including policy banks, state-owned commercial lenders and joint-stock banks, at a rate of 1.75%, she said. The loans, designed to have a one-year term, will be allowed to roll over four times. 

The PBOC’s relending programs consist of cheap funding offered to China’s banks that enables them to expand lending for specific parts of the economy. Tao said the 300 billion yuan of central bank cash will translate into an estimated 500 billion yuan of credit overall.

Policymakers earlier unveiled a major easing of mortgage rules, and encouraged local governments to buy unsold homes from developers for conversion into affordable housing. China’s 24-man Politburo called for policies to address the nation’s stock of unsold homes at a meeting last month. 

Lenders in the new program will be encouraged to extend financing to regional state-owned enterprises handpicked by local governments to support their purchase of unsold finished homes at reasonable prices, Tao said. 

Local government financing vehicles as well as SOEs involving regional hidden debt — or off-balance-sheet borrowing by authorities — will be barred from purchasing the homes, which should be sold or let out as public housing, she added. 

China’s real estate crisis has become the biggest drag on economic growth, as the nation’s indebted developers’ failure to deliver presold homes weighs on the sentiment of consumers. Official data Friday showed that home prices in April recorded the steepest month-on-month drops in a decade. 

The size of the central bank financing fell short of analyst estimates of at least 1 trillion yuan needed for the purchase. That could disappoint investors on Monday, after a Shanghai gauge of property stocks shot up 6.2% Friday in anticipation of stronger support.

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