Government Promotes Activation of Self-Housing Maintenance Projects... 90% of Project Costs Loaned at 1.2% Annual Interest

[Asia Economy Reporter Lee Chun-hee] The government is teaming up with public institutions to revitalize the Autonomous Housing Maintenance Project. Benefits such as low-interest loans at an annual rate of 1.2% covering up to 90% of the project cost will be provided.

The Ministry of Land, Infrastructure and Transport announced on the 14th that it will conduct a joint public contest with public institutions, Korea Land and Housing Corporation (LH) and Korea Appraisal Board, to make it easier for local residents to participate in the Autonomous Housing Maintenance Project, a type of small-scale housing maintenance project.

The Autonomous Housing Maintenance Project refers to a project for self-renovation or construction of detached houses, multi-family houses, and row houses. Unlike the existing complicated maintenance project procedures, construction can begin once a residents' consensus body is formed and project implementation approval and architectural review are obtained.

If, during the process, more than 20% of the total floor area is built as public-supported private rental or public rental housing, benefits such as relaxation of the floor area ratio up to the legal limit will be granted. Additionally, if the project is reflected in the local government's neighborhood regeneration activation plan, architectural exceptions such as building height restrictions and building coverage ratio relaxation can also be applied.

This contest will be divided into two types by the joint contest institutions: 'LH Participation Type' and 'Appraisal Board Support Type.' The LH Participation Type involves LH and residents participating together as joint project implementers, while the Appraisal Board Support Type involves the Appraisal Board discovering large-scale project sites with a total project cost of 10 billion KRW or more and supporting design costs.

The LH Participation Type is open to residents or residents' consensus bodies who have secured target land in 73 areas with aging or poor residential areas requiring renovation or new construction, where project promotion is sluggish within New Deal project sites, or in areas outside New Deal project sites. Subsequently, evaluation will be conducted based on criteria such as the current status and location conditions around the project site, housing aging, appropriateness of architectural plans, feasibility of project execution, resident consent, and public interest requirements. The Ministry of Land, Infrastructure and Transport and LH plan to accept applications from the 27th of this month to the 28th of next month.

If selected as a project contest site, support such as low-interest loan support and prior purchase commitments will be provided. Up to 90% of the total project cost can be financed with a low-interest loan at an annual rate of 1.2%. This raises the loan support limit for small-scale housing maintenance projects previously conducted by the Housing and Urban Guarantee Corporation (HUG) from 70% to 90% and lowers the interest rate from 1.5% to 1.2%.

Additionally, LH will implement a system that pre-commits to purchasing general pattern quantities. These quantities are planned to be supplied as public rental housing, which will help early resolution of project risks due to unsold units and greatly contribute to expanding public rental housing in the region. Furthermore, if the homeowner resides in the project target house, monthly rent costs during the construction period will also be supported with a low-interest loan at an annual rate of 1.2%, minimizing inconvenience for owners who renovate or rebuild aging houses themselves.

The Appraisal Board Support Type is open to projects with a total project cost of 10 billion KRW or more, where more than 50% of landowners have consented and the residents' consensus body has been registered or the registration has been received. Key evaluation criteria include project feasibility analysis, project cost and proportionality analysis, whether design specialization reflecting regional characteristics is applied, and whether public interest such as rental housing and shared facilities is incorporated.

The Ministry of Land, Infrastructure and Transport and the Appraisal Board plan to accept applications from the 3rd to the 31st of next month. Among the applicants, four projects with a total project cost of 10 billion KRW or more will be selected and provided with 15 million KRW in design support. Subsequently, public architects and other architectural experts will participate to enhance project professionalism and seek improvements in residential quality.

The Ministry explained that those who wish for rapid and stable project promotion based on public support should apply for the LH Participation Type, while those planning large-scale projects with a total project cost of 10 billion KRW or more should participate in the Appraisal Board contest. Simultaneous participation is also possible. Detailed information on the contest schedule, content, and application methods can be found on the LH and Appraisal Board websites.

Lee Ji-hye, head of the Housing Regeneration Division at the Ministry of Land, Infrastructure and Transport, said, "We hope that this joint public contest with public institutions will encourage local residents to take more interest in the Autonomous Housing Maintenance Project, where they voluntarily renovate aging houses."

This content was produced with the assistance of AI translation services.