[In-Depth Look] ‘Youth Customized Jeonwolse Deposit Guarantee’ That Reduces Housing Cost Burden

Woobyeongguk, Deputy General Manager, Korea Housing Finance Corporation

The ninja (NINJA) is a character known for exceptional martial arts skills, engaging in espionage, conspiracies, and assassinations. When The New York Times selected "ninja" as a neologism, it referred to high-risk debtors with No Income, No Job, and no Asset. However, the dark and heavy shadow of the ninja is now cast deeply over our youth as the COVID-19 pandemic prolongs.

The economic impact of COVID-19 on self-employed individuals has led to a decrease in part-time job opportunities for young people. Consequently, youth income has declined, and "two-meal-a-day" youths who cannot afford three meals a day are increasingly visible, significantly expanding the issue of youth poverty. In fact, a survey by JobKorea of 607 young people aged 20 to 29 found that 30.5% answered they currently have no income. Among respondents, 28.0% earned less than 1 million KRW per month. Four out of ten youths (37.1%) reported that they have missed meals due to insufficient living expenses. Of these, 27.1% said they missed meals once or twice a week or more.

The Youth Economic Hardship Index (calculated from the perceived unemployment rate and youth price index for those aged 15 to 29) published by the Hyundai Research Institute also shows a significant deterioration in youth living conditions, rising from 103.42 in 2019 to 113.36 in 2020, based on 100 in 2015.

Meanwhile, according to the Ministry of Land, Infrastructure and Transport's "2019 Housing Survey," the rent-to-income ratio (RIR) for youth households was about 18%, meaning youths spend one-fifth of their monthly income on housing costs. Even now, many young people reduce food expenses or choose housing with poor surrounding environments but lower rent to cope with burdensome housing costs. Living in quality housing has become almost a distant dream.

The Korea Housing Finance Corporation has been supporting "Youth Customized Jeonse and Monthly Rent Guarantees" since May 2019 to alleviate housing cost burdens and help secure quality housing for youths in such situations. This product provides rental deposit funds to non-homeowning youths aged 19 to 34 with a combined annual income of 70 million KRW or less.

Even if income verification is difficult, up to 70 million KRW for Jeonse (key money deposit) and up to 12 million KRW (500,000 KRW per month) for monthly rent can be used. Since the lowest guarantee fee rate applies to this product, it greatly helps youths with rental deposit preparation and monthly rent issues. As a result, about 93,000 people (4.7 trillion KRW) have used this product as of the end of March 2021, receiving positive responses.

Last year, the Housing Finance Corporation held a contest for testimonials from customers who used the Youth Customized Jeonse Guarantee. One customer expressed gratitude, saying that thanks to the Youth Customized Jeonse Guarantee, they were able to keep the flame of hope alive despite setbacks. Like this customer who received the gift of hope, we hope more youths can escape housing cost burdens and nurture hope for the future through the Korea Housing Finance Corporation’s Youth Customized Jeonse and Monthly Rent Guarantees. The Corporation will continue to strive to improve the system so that more youths can enjoy better quality housing life than now.

Woo Byung-guk, Deputy Director, Korea Housing Finance Corporation

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