[2023 National Audit] Jugumgong President: "Special Bogeumjari Concentration Before Interest Rate Hike"

"Special Bogeumjari Loan, a Product for Real Demand of Ordinary People"

[Image source=Yonhap News]

Choi Jun-woo, president of the Korea Housing Finance Corporation, explained that the special Bo-gum-ja-ri loan was created as a policy product to support low-income and actual demand borrowers, in response to opposition lawmakers' claims that the special Bo-gum-ja-ri loan increased household debt.

At the National Assembly's Political Affairs Committee audit held on the 24th, Oh Ki-hyung, a member of the Democratic Party of Korea, pointed out, "The special Bo-gum-ja-ri loan has become the main cause of the expansion of household loans," and questioned, "Has it become a loophole to evade the Debt Service Ratio (DSR) regulations?" Cho Eung-cheon, also from the Democratic Party of Korea, criticized the Korea Housing Finance Corporation for freezing the general type interest rate of the special Bo-gum-ja-ri loan and only raising it in August, saying, "Wasn't the general type interest rate held down to align with the government's policy direction of stimulating the real estate market and encouraging people to 'buy houses with debt'?"

In response, President Choi explained, "At the time of designing the special Bo-gum-ja-ri loan, interest rates were rapidly rising, so there was a need to broadly support low-income and actual demand borrowers," adding, "Therefore, we aimed to supply 39.4 trillion won and tried to refrain from raising interest rates as much as possible." Regarding the increase in applications despite the interest rate hike in the second half of the year, he said, "There was a concentration effect as the interest rate increase was announced first," and answered, "The DSR exemption for the special Bo-gum-ja-ri loan is fundamentally because it is a policy product intended to support low-income and vulnerable groups."

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