Special Lease Deposit Return Guarantee Launched as an Exception under the 'Reverse Jeonse Measures' Support

HUG-SGI Also Handles from the 27th

Korea Housing Finance Corporation (HF) announced on the 26th that it will introduce and implement the ‘Special Jeonse Deposit Return Guarantee’ starting from the 27th. The special guarantee will also be handled by Korea Housing & Urban Guarantee Corporation (HUG) and Seoul Guarantee Insurance (SGI) from the same day.

[Image source=Yonhap News]

The special guarantee is a follow-up measure to the reverse Jeonse crisis countermeasures announced earlier this month in the 2023 second half economic policy direction. Landlords who use loans benefiting from the relaxation of the Debt Service Ratio (DSR) regulation to return Jeonse deposits are required to subscribe mandatorily to protect subsequent tenants. This allows landlords to find subsequent tenants more quickly, and subsequent tenants can worry less about the non-return of Jeonse deposits.

The special guarantee is subscribed to by the subsequent tenant, with the landlord paying the guarantee fee, and applications can be made from the 27th at HF’s entrusted financial institutions (commercial banks). HUG accepts applications through the internet, branches, and entrusted financial institutions, while SGI accepts applications through branch visits. Additionally, a guarantee where the landlord directly subscribes and pays the guarantee fee is scheduled to be launched next month.

To protect more tenants from the risk of reverse Jeonse, the special guarantee has increased the maximum Jeonse deposit guarantee amount (70 million KRW in the metropolitan area, 50 million KRW in other regions) to 100 million KRW, and the guarantee fee rate has been set at the same level among public guarantee institutions (HF, HUG) (0.13% for apartments, 0.15% for non-apartments).

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