(Bloomberg) -- A Chinese city facing the most boycotts by angry homeowners is setting up a bailout fund to help cash-strapped developers complete housing projects.

Henan Asset Management Co. and government-backed developer Zhengzhou Real Estate Group will jointly set up a fund for the real estate sector, the provincial asset manager said in a statement dated Tuesday on its website, without providing further details. 

Zhengzhou’s fund marks the first state-backed bailout proposal in China, as the government grapples with a property crisis that risks engulfing the country’s banks and middle-class homeowners. Henan’s capital city of Zhengzhou has seen the most mortgage boycott notices, according to data tallied by the research institute affiliated with Shanghai-based E-House (China) Enterprise Holdings Ltd.

The wild boycotts have spread to at least 301 housing projects in about 91 cities as of Sunday as consumers withold payments to protest delayed construction, according to figures from a crowdsourced document titled “WeNeedHome.” Loans worth as much as 2 trillion yuan ($297 billion) threaten to deepen China’s real estate slump by spreading to its massive banks, which have relied on mortgages as their safest source of revenue.

Financial regulators have urged banks across China to boost lending to builders to help them finish projects, and officials are even considering giving homeowners a grace period on payments, according to people familiar with the matter.

The government of Henan, a province of about 100 million people in central China, has also faced protests over an alleged banking scam. Hundreds of bank customers protested earlier this month, calling on authorities to return tens of billions of yuan of deposits.

Governments in Chongqing and Ningbo have also set up working groups to tackle the issue of unfinished property projects, according to local media reports. Cities in Guangdong and Hebei meanwhile have urged banks to tighten control of escrow accounts, local media have reported.

©2022 Bloomberg L.P.