Approval Granted for Bogumjari Loan Applications Even if House Price Exceeds 600 Million Won

"If the house price exceeds 600 million won but was below 600 million won on the application date, you can receive the Bogumjari Loan"

[Asia Economy Reporter Park Sun-mi] Even if the house price suddenly exceeds the application criterion of 600 million KRW after applying for the Bogeumjari Loan, approval will be possible. In addition, the preferential interest rate application range will be raised from a combined annual income of 60 million KRW or less for couples to 70 million KRW or less for newlywed households and multi-child households.

The Korea Housing Finance Corporation (KHFC) announced on the 23rd a preliminary notice of the revised Bogeumjari Loan processing standards containing these details.

They stated that the processing standards will be revised so that loans can be granted if the market price at the time of application is 600 million KRW or less, even if the collateral house’s appraisal value exceeds 600 million KRW on the loan approval date.

However, this applies only when there is market price information from KB Kookmin Bank or the Korea Appraisal Board (Real Estate Tech). Also, if the house price exceeds 900 million KRW at the time of collateral appraisal (approval date), the loan cannot be processed. Until now, KHFC did not grant Bogeumjari Loans if any of the market price, appraisal value, or sale price exceeded 600 million KRW at the time of loan approval.

KHFC also plans to raise the income threshold for preferential interest rates from the current combined annual income of 60 million KRW or less for couples (70 million KRW or less for newlyweds) to 70 million KRW or less for newlywed and multi-child households.

This adjustment is made considering that the median income for a five-person household this year is about 67.533 million KRW annually, aiming to allow more people to benefit. Additionally, the limited liability type Bogeumjari Loan (where repayment responsibility is limited to the value of the collateral house even if the house price falls), which was previously only allowed for those without homeownership, will now also be permitted for temporary two-homeowners who have agreed to dispose of their existing home.

Regarding the revision, KHFC explained, "We intend to change the Bogeumjari Loan handling requirements to enhance predictability for policy mortgage applicants and strengthen inclusive financial policy support such as preferential support for multi-child households."

The Bogeumjari Loan is a product that lends up to 300 million KRW for housing purchase funds, etc., through a long-term fixed interest rate installment repayment method. Since it was introduced to help low-income people own homes, the interest rate is low and the application conditions are strict.

It applies only to houses priced at 600 million KRW or less, but as housing prices have risen rapidly recently, some applicants were rejected because the house price exceeded 600 million KRW during the review period, which can take up to 40 days, even though the price was below 600 million KRW at the time of application. From 2019 until July of this year, there were 167 cases where applicants for the Akim-e Bogeumjari Loan (electronic contract method) were rejected because the house price exceeded 600 million KRW.

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