Authorities in Shanghai, China's financial and business center, temporarily stopped the city's public housing fund from making some loans to homebuyers Wednesday, in an effort to cool the city's housing market.

The Shanghai Municipal Public Housing Administration Center said the fund will no longer extend loans to second-home buyers if the floor area of their first home divided by the number of family members is larger than the local average of 34 square meters per family member.

Moreover, loans to second-home buyers are capped at 400,000 yuan (59,940 U.S. dollars), if the floor area of the first home per family member is no more than 34 square meters, the center said.

The fund also stopped lending for purchases of third and more homes, in line with national policy.

For a family's first-home purchase, the loan is capped at 600,000 yuan and the down payment is at least 20 percent if the home is no larger than 90 square meters and it is 30 percent if the home is larger than 90 square meters.

In China, residents contribute half of the public housing fund and the agency or company they work for contribute the other half. Residents can receive the money after purchasing a home. Interest rates on public housing fund loans are lower than bank loans.

On Thursday, the Shanghai municipal government issued rules limiting families to the purchase of one more apartment.

Shanghai authorities are also preparing to introduce a property tax.