(Repeats adding reporting credit, with no changes to text)
BEIJING, Sept 3 (Reuters) - China is relaxing its financing rules for listed property firms by allowing those that meet a certain criteria to sell medium-term notes in the interbank market, three sources with knowledge of the matter said.
Money raised from the sale of notes can be used to fund new residential housing projects, supplement companies' operating cash flows and repay bank loans, the sources said. The cash cannot be spent on buying land, they said.
"Developers that qualify include those that participated in affordable housing projects and focused on sales of medium- and small-sized homes," one of the sources said.
"Qualified developers should also focus on sales of medium-and small-sized homes in their future businesses," the source said.
The regulator of China's interbank market, the National Association of Financial Market Institutional Investors, declined to comment.
China's once-heated property market is experiencing its sharpest slowdown in two years as sales and prices turned south after an exceptionally buoyant 2013.
The housing slowdown has forced a cash squeeze on some developers. A Reuters study in June showed cash to short-term-debt ratios for some 80 listed property companies were at two-year lows. (Reporting by Xie Heng and Koh Gui Qing; Editing by Simon Cameron-Moore)