[Exclusive] From the 14th, Bogeumjari Loan 'Gap Investment Abuse' Completely Blocked...Significant Strengthening of Two-Home Ownership Verification

Additional Housing Acquisition Verification Period Reduced from 3 Years to 1 Year
Disposition Deadline for Owning 2 Houses Shortened from 1 Year to 6 Months
Institutional Improvements to Prevent Gap Investment... No Retroactive Application

The number of autonomous districts in Seoul where the average apartment sale price exceeds 50 million KRW per 3.3㎡ has more than doubled in one year. As of November last year, only Gangnam-gu, Seocho-gu, and Songpa-gu among the 25 autonomous districts in Seoul had average apartment sale prices exceeding 50 million KRW per 3.3㎡, but last month, Yongsan-gu, Seongdong-gu, Mapo-gu, and Gwangjin-gu were added, making a total of seven districts. The photo shows the view of Seoul apartments from 63 Square. Photo by Kim Hyunmin kimhyun81@

[Asia Economy Reporter Kim Jin-ho] The requirements for the ‘Bogeumjari Loan,’ a policy financial product popular as a means for ordinary citizens to purchase their own homes, will be strengthened. The main points are significantly shortening the period for verifying additional home acquisitions and the deadline for disposing of a second home. This measure is analyzed as a systemic supplement to prevent the Bogeumjari Loan from being misused as a tool for ‘gap investment’ (buying a house with a small amount of money using jeonse deposits).

According to the financial sector on the 10th, the Korea Housing Finance Corporation will drastically shorten the verification period for additional home acquisitions from the current 3 years to 1 year (on each anniversary after execution) starting from Bogeumjari Loan applications on the 14th.

Also, if additional home acquisition is confirmed during the verification stage, the grace period to sell the house will be shortened from the current 1 year to 6 months. There is also an option to repay the Bogeumjari Loan instead of selling the house. However, considering the nature of the Bogeumjari Loan, which cannot be refinanced with general commercial bank mortgage loans, this is expected to effectively force disposal as well.

In particular, if the house is not disposed of within the deadline, not only will the borrower lose the benefit of the existing deadline (repayment demand), but also, if non-compliance continues, the borrower will be registered as delinquent and foreclosure (forced execution) procedures will be carried out.

The Bogeumjari Loan is a fixed-rate mortgage loan provided for houses priced at 600 million KRW or less and for annual incomes of 70 million KRW or less (85 million KRW for newlyweds). The maximum term is up to 40 years, and the maximum limit is about 360 million KRW.

The Korea Housing Finance Corporation’s move to significantly strengthen the verification of the Bogeumjari Loan is interpreted as a response to concerns that it has been misused for gap investment. The institution is reinforcing the system in line with the policy intent of the Bogeumjari Loan, which targets ordinary citizens and genuine homebuyers. Although there was a post-verification system before, additional home acquisitions were checked 3 years after execution with a 1-year grace period, effectively allowing gap investment for 4 years. In fact, cases of gap investment using the Bogeumjari Loan can be found quite frequently in financial and real estate communities.

However, as verification is significantly strengthened, it is expected to be difficult to find cases of misuse for gap investment going forward. Since verification will be conducted annually and the grace period reduced to 6 months, the physical time available for gap investment has been greatly reduced.

Meanwhile, the strengthened measures will not be applied retroactively to existing Bogeumjari Loan borrowers but will apply only to new applicants from the 14th onward.

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