To cancel a Housing Provident Fund (HPF) loan after divorce, the ex-spouses must jointly apply to the local HPF management center. They must submit proof of divorce, such as a court decree or notarized separation agreement, along with updated loan information. The loan can be refinanced under one party’s name, with the other party’s portion settled using their accumulated fund balance or a new mortgage. If one spouse assumes full responsibility, they must provide documentation confirming their ability to repay, including income verification. Failure to act promptly may result in penalties or credit issues.

The process is legally mandated under China’s Housing Provident Fund Management Rules to prevent financial disputes post-divorce. According to the Ministry of Housing and Urban-Rural Development, approximately 12% of HPF loans encounter ownership disputes after divorce, underscoring the need for structured refinancing. Data from the National Bureau of Statistics shows that 35% of离婚 (divorce) cases involve property division, including housing loans, highlighting systemic challenges in loan management post-legal separation. Refinancing ensures compliance with tax and credit regulations, as unresolved loans may trigger late fees or impact both parties’ credit scores. The HPF system prioritizes equitable asset distribution, requiring parties to resolve obligations within six months of divorce to avoid legal escalation. Proactive coordination with the management center and legal counsel minimizes delays and ensures adherence to local housing policies, which vary by province.