Ministry of Land, Infrastructure and Transport Lowers Housing and Urban Fund Business Loans by 0.3?0.5%p

[Asia Economy Reporter Yoo In-ho] The loan interest rates for the Housing and Urban Fund for developers constructing national rental housing and public sale housing will be reduced by up to 0.5 percentage points (p).

On the 2nd, the Ministry of Land, Infrastructure and Transport announced that, considering the Bank of Korea's base rate cut, the loan interest rates for developers' loans for constructing rental housing and sale housing for low- and middle-income households will be lowered by 0.3~0.5%p.

The Housing and Urban Fund operates various loan products to support the construction of rental and sale housing for low- and middle-income households, taking into account the fund's soundness. So far, priority has been given to lowering loan interest rates for demand-side borrowers to stabilize housing for low-income households.

However, as market interest rates have decreased and to support the expansion of housing supply and economic recovery, it was decided to reduce the developers' loan interest rates for projects starting construction within one year.

For rental housing (National Rental Housing Fund, Happy Housing Fund, Public Rental Housing Fund), the interest rate will be lowered by 0.3%p, considering the company bond interest rate level of LH's self-financed funds.

With this interest rate cut, the annual interest cost per household during rental housing construction is expected to decrease by approximately 110,000 to 230,000 KRW.

Assuming an annual supply of 20,000 National Rental Housing units, rental fees are expected to decrease by about 2.3 billion to 4.4 billion KRW per year.

For sale housing (Public Sale Housing Fund, Post-Sale Housing Fund, Urban-Type Residential Housing, Multi-family and Multi-unit Housing Fund), the interest rate will be lowered by 0.5%p, reflecting the base rate cut level. This interest rate reduction is expected to reduce the annual interest cost per household for public sale housing construction by approximately 280,000 to 380,000 KRW.

This Housing and Urban Fund developers' loan interest rate reduction measure will be implemented from the 21st after revising loan regulations and adjusting bank systems. It will be applied immediately to projects starting construction within one year from the implementation date, and after one year, additional implementation and detailed conditions will be reviewed considering policy circumstances.

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