Support Pillar Jeonse Loan Interest Rate Reduced by 0.3%P... Follow-up Measures to the July 7-10 Plan

[Asia Economy Reporter Moon Jiwon] The government is lowering the interest rates on the Buteemok Jeonse Loan to improve the housing environment for non-homeowners with genuine housing needs. Additionally, a preferential loan limit condition proportional to the number of children will be established for single-parent families and others.

The Ministry of Land, Infrastructure and Transport announced on the 3rd that it will implement strengthened housing support policies for non-homeowners with genuine housing needs as a follow-up measure to the July 10 real estate policy.

The Ministry of Land will revise the Housing and Urban Fund operation plan to implement ▲lower interest rates on Housing and Urban Fund Jeonse and monthly rent loans ▲establish preferential loan limit conditions proportional to the number of children for single-parent families and families with children affected by traffic accidents ▲promote the Shared Housing Mother Fund investment project.

First, the Buteemok Jeonse Loan is a loan available at lower interest rates compared to commercial banks to stabilize housing for non-homeowners, and this time the interest rate will be reduced by 0.3 percentage points to as low as 1.8~2.4% per annum (excluding preferential rates).

For a Jeonse loan of 100 million KRW, the interest decreased by 200,000 KRW annually due to the Buteemok loan interest rate reduction in May, and this measure will further reduce it by 300,000 KRW annually.

The housing stability monthly rent loan will have its interest rate lowered by 0.5 percentage points to 2.0% per annum for the general type and 1.0% per annum for the preferential type. For a monthly rent loan of 400,000 KRW with one year of residence, the general type borrower will pay a maximum interest of 96,000 KRW annually, and the preferential type borrower will pay 48,000 KRW annually.

The youth-exclusive product, the Youth-Only Buteemok Loan, will expand the eligible housing price from 70 million KRW to housing priced up to 100 million KRW, and increase the loan limit from 50 million KRW to 70 million KRW.

The loan interest rate will be lowered by 0.3 percentage points to 1.5~2.1% per annum (excluding preferential rates), so for a 70 million KRW loan at 1.5% interest, the monthly interest burden will be only 88,000 KRW.

The Ministry of Land will establish preferential loan limit conditions proportional to the number of children for 'Jeonse funds for single-parent families and others.'

The Jeonse fund loan for single-parent families and others is a project that provides free Jeonse funds until the child’s protection period or age 20 to single-parent families, foster children, families with children affected by traffic accidents, and those discharged from child welfare facilities.

Previously, regardless of the number of household members, Jeonse funds were supported up to a maximum of 90 million KRW in the metropolitan area, but going forward, if there are two protected children, support will increase up to 120 million KRW in the metropolitan area, and if there are three or more protected children, an additional 20 million KRW will be provided per child.

Furthermore, the Ministry of Land has established the basis for investment in the 'Shared Housing Mother Fund,' which supports the supply of shared housing in university areas and station areas densely populated by youth and single-person households.

The Shared Housing Fund will provide initial business funds to startups, small and medium-sized enterprises, venture companies, and social enterprises that operate shared housing or provide shared services in urban areas, and plans to secure public interest by supplying housing at rents lower than surrounding market prices.

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