LH Signs Agreement with Financial Institutions to Expand Supply of Purchased Rental Housing

Agreement Signed with Woori Bank and Others to Support Private Businesses in Purchase Commitment
Expecting Reduced Financial Burden and Revitalization of Purchase Commitment Projects through Development of Business Loan Products

Ha Seung-ho, Head of LH Housing Welfare Headquarters (center), Lee Moon-seok, Head of Woori Bank IB Group (left), and Kim Sung-hoon, CEO of Kiwoom Investment Asset Management, are posing for a commemorative photo after signing a financial institution business agreement to promote private construction housing purchase contracts on the 26th.

[Asia Economy Reporter Jo Gang-wook] Korea Land and Housing Corporation (LH) announced on the 27th that it signed a business agreement with Woori Bank and Kiwoom Investment Asset Management on the 26th at the LH Seoul Regional Headquarters to revitalize the Private Construction Housing Purchase Agreement Project.

Through this business agreement, the three organizations plan to develop exclusive loan products for the purchase agreement project and provide various financial consultations such as funding procurement and tax benefits for private businesses to supply high-quality rental housing.

Once the exclusive loan product for the purchase agreement project is established, it is expected to reduce the initial funding burden, which has been the biggest obstacle for private businesses to participate in the project. In addition, through expert consultations on project fund management and tax benefits, various questions arising from project implementation can be resolved, leading to an increase in private businesses newly participating in the project.

The financial institutions attending the agreement also agreed to strengthen promotion of the project by placing pamphlets related to the purchase agreement project and loan products at bank branches and other sales networks.

The "Private Construction Housing Purchase Agreement Project" is a project where private businesses enter into a prior purchase agreement for houses they construct, and after completion, LH purchases them and supplies them as rental housing. LH first introduced the purchase agreement project in 2019 to expand the supply of purchase rental housing. Unlike the existing method of purchasing and supplying completed houses, LH can secure housing quality by inspecting major construction processes, and private businesses can reduce the risk of unsold or unleased units through purchase agreements and enjoy benefits such as low-interest loans through the Housing and Urban Fund.

The volume of purchases through the purchase agreement project has been significantly increasing, from 2,000 units in 2019, the first year of introduction, to 6,000 units in 2020, and about 20,000 units this year. Initially, many businesses hesitated to participate due to a lack of understanding of the system, but with strengthened system promotion and various support measures such as incentives for participating businesses, the purchase agreement project is gaining momentum. Amid the current difficulties faced by private businesses due to rising construction raw material prices, it is expected that the purchase agreement project will be further revitalized with the establishment of loan products for private businesses through this agreement.

An LH official said, "With this agreement, the initial funding burden on private businesses will be alleviated, and the purchase agreement project is expected to gain vitality. We will continue to strive for housing stability by promptly supplying high-quality rental housing."

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