Housing Finance Corporation Expands Jeonse Guarantee Support for Vulnerable Groups... "9.2 Trillion Won Support"

Financially Vulnerable Groups Including Youth, Newlyweds, and Credit Rehabilitators
Support Increased 2.5 Times Year-on-Year to 9.2 Trillion Won

[Asia Economy Reporter Park Sun-mi] Korea Housing Finance Corporation (HF) announced on the 15th that it supplied 9.2 trillion KRW in jeonse deposit guarantees to financially vulnerable groups from the beginning of this year until November, reducing their annual housing cost burden by 64.7 billion KRW.

The youth jeonse guarantee supported 5,000 households with 2.6 trillion KRW, a 375% increase compared to the same period last year, until November this year. The youth jeonse guarantee is a product that supports housing deposits up to 70 million KRW at an interest rate in the 2% range for non-homeowners aged 34 or younger. It was found that job seekers and young workers with an annual income of 30 million KRW or less received jeonse loan guarantees of 50 million KRW per person.

The local government agreement jeonse guarantee product supported 30,000 households with 3.4 trillion KRW, a 147% increase compared to the same period last year, until November this year. Newlyweds and young people used the jeonse guarantee of 130 million KRW at an average annual interest rate of 1.4%, receiving interest support from local governments. HF explained that this reduced the monthly interest cost by 130,000 KRW compared to general jeonse guarantee users.

Jeonse deposit guarantees through financial institution agreements supported 20,000 households with 2.8 trillion KRW, an 84% increase until November this year. This product is one where financial institutions partially reduce loan interest rates and HF offers preferential guarantee fees, mainly used by newlyweds and multi-child families.

Additionally, special support jeonse guarantee products for credit recovery support recipients and policy low-income finance users supported 5,000 households with 300 billion KRW, a 21% increase compared to the same period last year, until November this year.

A corporation official stated, “This year, to support the reduction of housing costs for low-income groups struggling due to COVID-19, we collaborated with local governments and financial institutions to provide 9.2 trillion KRW in jeonse guarantees, alleviating annual interest burdens by 60 billion KRW and offering 4.7 billion KRW in preferential guarantee fees, thus reducing the total cost burden by 64.7 billion KRW. We will continue to support jeonse guarantees mainly for low-income groups through the development of new products for financially vulnerable groups.”

Meanwhile, the products that the corporation offers in collaboration with related institutions to alleviate housing cost burdens for vulnerable groups are broadly divided into three types. The youth jeonse guarantee, which offers a preferential loan interest rate reduction of 0.3 to 0.6 percentage points through agreements with 13 banks; the local government agreement jeonse guarantee, where local governments support loan interest rates by 1 to 2 percentage points through agreements; and the financial institution agreement jeonse guarantee, which offers a preferential loan interest rate reduction of 0.1 to 0.2 percentage points through agreements with individual financial institutions. The corporation added that it offers preferential guarantee fees at the minimum guarantee fee rate (0.05%) for these products.

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