BEIJING - The People's Bank of China (PBOC), the central bank, said Monday that commercial banks should put in place a differentiated credit policy to guarantee housing loans to qualified first-home buyers.

The remarks by Liu Shiyu, vice governor of the PBOC, came from a press conference on the sidelines of the ongoing annual parliament session.

The central bank would implement the differentiated credit policy this year to ensure that qualified residents are able to get the mortgage loans they need from banks when buying the first ordinary commercial housing units, ?Liu said.

However, he warned commercial banks against taking risks and urged them not to engage in developers' promotions of selling houses with only 10 percent of the down payment.

Previously, the PBOC allowed banks to grant loans to first-home buyers with a prime mortgage rate as low as 70 percent of the benchmark lending rate.

Liu said the central bank encourages financial institutions to price their loans in accordance with the financial conditions of borrowers.

In January, more Chinese cities reported declines in house prices as the government vowed to continue measures designed to cool the property market, the National Bureau of Statistics (NBS) said.

The NBS data showed new home prices fell in 48 of a statistical pool of 70 major cities in January, while new home prices in 22 cities remained unchanged. None of the 70 cities reported increases in new home prices.

Liu said banks should support the construction of ordinary commercial housing units, particularly by house developers with a good reputation.

Banks should also support the construction of rental property and government-subsidized housing on a market-based principle with financial sustainability, Liu said.

According to the finance official, the growth rates of personal housing loans have slowed for 20 consecutive months, with property-related loans growing at a pace 3 percentage points lower than the overall banking loan growth last year.

"It [the slower mortgage loan growth] shows the macro control over the real estate market is heading in a good direction," Liu said, "but we need to begin studying the impact it may cause in the future."

The PBOC encourages market-based financial innovations in the property market, such as the securitization of mortgage loans and the introduction of real estate trust funds, Liu said.