First Home LTV 90%·Up to 10 Million Won Basic Loan.. Lee Jae-myung Announces Emergency Financial Regulation Proposal

Up to 90% LTV for First Home... Youth-Only DSR Applied
Increased Loan Limits to Protect Actual Buyers During Moving Season

[Image source=Yonhap News]

[Asia Economy Reporter Koo Chae-eun] Lee Jae-myung, the presidential candidate of the Democratic Party of Korea, announced an ‘Emergency Financial Relief Support Plan’ that allows first-time homebuyers to receive an LTV of up to 90%, considering region, area, and price, and enables ultra-low interest long-term loans of up to 10 million KRW primarily for young people in their 20s and 30s.

On the 27th, Candidate Lee announced the ‘Emergency Financial Relief Support Plan’ for small business owners, self-employed individuals, and financially vulnerable groups affected by the prolonged COVID-19 pandemic. The core of the plan is the reform of the youth-exclusive DSR system, which considers future income to support youth housing welfare, including raising the LTV to 90%. Additionally, a ‘basic loan,’ an ultra-low interest long-term loan, will be introduced mainly targeting young people in their 20s and 30s. Public guarantees will be expanded by raising the loan limits for vulnerable groups’ jeonse (key money deposit) loans, and the limits for youth-tailored jeonse and monthly rent loan guarantees will be increased and realized.

Candidate Lee stated that the loan maturities for small business owners and self-employed individuals, which end at the end of March, will be extended, and principal and interest repayment deferral measures will be pursued. Among small business owners and self-employed individuals who have already entered delinquency or are at risk of delinquency during the COVID-19 period, the government plans to take over and manage the debts of those with potential for recovery.

[Image source=Yonhap News]

Separately from existing programs conducted by the Credit Recovery Committee and others, a ‘Special Program for COVID-19 Crisis Relief’ will be launched to alleviate the debt burden of self-employed individuals incurred over the past two years. This is a more proactive ‘credit pardon’ measure than the current government’s COVID-19 credit amnesty, aimed at preventing financial disadvantages such as credit downgrades caused by COVID-19.

A Korean-style Payroll Protection Program (PPP), a fixed cost reduction program for rent and labor costs, will be introduced. This system provides policy funds of 50 million KRW at low interest to self-employed individuals who registered their business and operated before COVID-19, and if they prove that the funds were used for fixed costs such as rent and labor, the principal and interest will be forgiven accordingly.

Furthermore, to reduce the financial burden on ordinary citizens, measures such as △easing the burden of loan principal and interest repayments, reducing interest burdens △introducing basic loan rights △standardizing the application criteria for interest rate reduction requests will be pursued. In addition, Candidate Lee announced plans to establish a ‘National Coexistence Bank’ as a concrete system to overcome the government’s fiscal input limits and provide sustainable support for people’s livelihoods.

[Image source=Yonhap News]

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