Housing Finance Corporation Raises Guarantee Limits for Landlords and Homeless Youth

Maximum 200 Million KRW for Rental Deposit Return Guarantee

Expansion of Special Jeonse Loan Guarantee for Homeless Youth

[Asia Economy Yeongnam Reporting Headquarters Reporter Kim Yong-woo] The guarantee limit for the ‘Lease Deposit Return Fund Guarantee,’ which landlords use to obtain loans to return the jeonse deposit to tenants, will be increased. Additionally, the limit for the ‘Special Jeonse Fund Guarantee for Homeless Youth’ will also be raised.

Korea Housing Finance Corporation (HF) announced on the 25th that from the 26th, it will expand the limits of the Lease Deposit Return Fund Guarantee and the Special Jeonse Fund Guarantee for Homeless Youth. This is part of the follow-up measures from the government’s 3rd Real Estate Related Ministers’ Meeting.

The Lease Deposit Return Fund Guarantee is a guarantee product used when a landlord obtains a loan to return the lease deposit to the tenant due to reasons such as the expiration of the lease contract or renewal with a reduced deposit.

HF Corporation decided to increase the total limit of the Lease Deposit Return Fund Guarantee from 100 million KRW to 200 million KRW, and the guarantee limit per house for landlords from 50 million KRW to 100 million KRW.

Key Requirements for Lease Deposit Return Guarantee Funds.

However, the individual guarantee limit varies depending on the house price, lease deposit amount, and the presence of senior claims.

The guarantee target is landlords who wish to obtain loans from financial institutions to return the lease deposit to tenants.

The house price must be 1.2 billion KRW or less. Also, the loan (guarantee) limit is within 100 million KRW per house and is the lesser amount between 30% of the existing lease deposit and a separately calculated value.

The guarantee fee borne by the customer is determined by the guarantee amount, guarantee period, and guarantee fee rate. The guarantee fee rate is 0.6%, and for preferential households such as multi-child families, newlyweds, and low-income earners, 0.1 percentage points are deducted, but these are not applied cumulatively.

The Lease Deposit Return Fund Guarantee can be applied for at financial institution branches, and the application period is within three months before or after the lease contract expiration date or within three months before or after early termination of the contract.

HF Corporation will also raise the limit of the Special Jeonse Fund Guarantee for Homeless Youth from 100 million KRW to 200 million KRW. However, if the special jeonse fund guarantee amount exceeds 100 million KRW, a guarantee limit based on repayment ability (considering income, debt, etc.) will be applied.

The Special Jeonse Fund Guarantee for Homeless Youth is a special product that offers preferential recognized income and guarantee limits compared to general jeonse fund guarantees to homeless persons aged 34 or younger with a combined annual income of 70 million KRW or less (lease deposit up to 700 million KRW in the metropolitan area and 500 million KRW in other regions).

President Choi Jun-woo said, “I hope this will help landlords who are struggling to return lease deposits due to falling jeonse prices and slightly reduce the housing cost burden for young people and those starting their social lives,” adding, “We will promote various institutional improvements to alleviate the national housing cost burden.”

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