HF Construction Expands Principal Reduction for Housing Warranty Debtors... Up to 70% Principal Reduction

[Asia Economy Yeongnam Reporting Headquarters Reporter Hwang Du-yeol] HF Corporation will temporarily ease the debt adjustment criteria until the end of next year to reduce the repayment burden on individual debtors who used the corporation's housing guarantee products such as jeonse and interim payments but failed to repay the principal and interest to the bank, and the corporation repaid on their behalf.

Previously, principal reduction was only possible for written-off claims, but from now on, general claims can also receive a principal reduction of up to 70% (up to 30% after 6 months) if 12 months have passed since the corporation repaid the debt to the bank on their behalf.

Written-off claims refer to claims that are excluded from assets in accounting due to being unrecoverable, but collection activities continue separately from accounting treatment until the statute of limitations is completed.

The easing measure is part of the government’s ‘Strengthening Support Measures for Credit Recovery on Guaranteed Loans’ policy promoted last year, aimed at helping vulnerable groups such as self-employed people who have been in long-term arrears due to COVID-19 to quickly organize their debts within their repayment capacity.

HF Corporation plans to select eligible individuals through strict screening of personal repayment ability, including verification of income and asset holdings, to prevent moral hazard, and the measure will be implemented temporarily until the end of 2023.

President Choi Jun-woo said, “Loans handled with the corporation’s guarantee have a relatively delayed debt adjustment eligibility compared to general loans, and this measure was prepared to quickly support the economic recovery of debtors.”

President Choi added, “The corporation will continue to prepare various support measures for those experiencing economic difficulties due to COVID-19 and other reasons.”

Applications for debt adjustment for principal reduction can be made by visiting the responsible branch in person or through non-face-to-face methods using the corporation’s website or mobile app (Smart Housing Finance).

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