Starting This Month, Real Estate PF Normalization Fund and Others Fully Launched

From this month, financial supply for the normalization of PF (Project Financing) sites, including the real estate project financing (PF) normalization fund, will be in full swing.

On the 5th, the Financial Services Commission announced that it held a "Meeting to Review and Communicate the Financial Sector Tasks for Activating Housing Supply" chaired by Standing Commissioner Kwon Dae-young at the Government Seoul Office in Jongno-gu, Seoul. Attendees included representatives from the Financial Services Commission, Ministry of Economy and Finance, Ministry of Land, Infrastructure and Transport, Financial Supervisory Service, policy financial institutions, the Korea Federation of Banks, the Korea Federation of Savings Banks, the Credit Finance Association, and major financial holding companies.

First, about KRW 19 trillion in financial supply has been announced for normal PF sites. Korea Housing Finance Corporation (HF) and Korea Housing & Urban Guarantee Corporation (HUG) have secured a total of KRW 10 trillion in PF operator guarantee capacity, and policy financial institutions (Korea Development Bank, Industrial Bank of Korea, Korea Credit Guarantee Fund) will also supply more than KRW 7.2 trillion in financing starting this month.

Kwon Dae-young, Head of the Financial Innovation Planning Division at the Financial Services Commission, is explaining the details related to the first meeting of the Innovative Finance Review Committee at the government Seoul office briefing room on the 1st. / Photo by Moon Ho-nam munonam@

Additionally, the Construction Guarantee Union is promoting the launch of KRW 6 trillion worth of completion guarantees and operator loan payment guarantee products to support construction companies at non-apartment PF sites, and the five major financial holding companies plan to supply about KRW 4 trillion by the end of the year as loan extensions and new funds for existing PF sites.

Commissioner Kwon emphasized, "One of the core points of this measure is to actively supply the necessary funds for project progress to viable normal PF sites to facilitate smooth housing supply," adding, "In cases where market outlooks are uncertain or even if projects are viable but construction companies face financial difficulties hindering smooth project financing, a more active role by public guarantee institutions and policy financial institutions is necessary."

The real estate PF normalization fund (totaling KRW 2.2 trillion), which will be invested in the normalization and restructuring of PF sites lacking viability or at risk of insolvency, will also be fully operational starting this month.

The Kamco Fund, created through matching funds from Korea Asset Management Corporation (KAMCO) and private investors, has exceeded its target amount of KRW 1 trillion and completed formation at about KRW 1.1 trillion. The Kamco Fund is divided into the "Kamco Platform," jointly discovered and operated by KAMCO and the financial sector, and a method where asset management companies independently discover and invest in PF sites.

In the case of the Kamco Platform, bidding for the purchase of some PF sites with high restructuring potential began at the end of last month and is scheduled to be fully operational from this month. Asset management companies are also conducting their own site discoveries. For example, Shinhan Asset Management purchased a bridge loan stage site worth KRW 65 billion and is pursuing conversion and investment for housing purposes.

Separately, funds created with their own resources by financial holding companies, the credit finance sector, and the savings bank sector are also expected to be established at a maximum scale of KRW 1.1 trillion. The credit finance sector plans to form a KRW 400 billion fund, savings banks KRW 100 billion, and Industrial Bank of Korea KRW 150 billion, while three of the five major financial holding companies not participating as Kamco Fund operators will invest KRW 450 billion.

Commissioner Kwon stated, "The government's measures for the soft landing of real estate PF are not simply to defer insolvency," and added, "Although the situation is difficult, if joint efforts spread, the difficulties in PF sites and housing supply will gradually be resolved over time."

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