Small Business Real Estate Secured Loan National Housing Bond Purchase Cost 180 Billion KRW Refund

Application for Real Estate Secured Loans by 720,000 Owners
Average Refund of 250,000 KRW per Person Expected
Banks Accept Applications at All Branches, Mutual Finance at Loan Branches

The financial sector will refund approximately 180 billion KRW in unnecessary National Housing Bond purchase discount costs that about 720,000 small business owners incurred when taking out real estate mortgage loans.

On the 17th, the Financial Supervisory Service announced that the financial sector will begin refunding these costs starting from the 18th.

The National Housing Bond is a bond issued through the Housing and Urban Fund to raise funds necessary for the national housing project. According to the Housing and Urban Fund Act, when obtaining a loan to purchase a house and applying for real estate mortgage registration, it is mandatory to purchase National Housing Bonds. The bonds are immediately sold upon purchase, and the purchase amount is determined based on the bond discount rate. However, if the borrower uses their own real estate as collateral, the obligation to purchase National Housing Bonds is exempted.

However, since customer application is the principle and due to reasons such as financial companies or legal professionals not properly recognizing the law, unnecessary purchase discount costs have been incurred. To correct this, the financial sector has decided to provide refunds.

According to the Financial Supervisory Service, small and medium-sized enterprises and individual business owners who took out real estate mortgage loans using their own property as collateral purchased a total of 723,000 National Housing Bonds (26.356 trillion KRW) over the past five years, incurring 143.7 billion KRW in discount costs. The financial sector will refund 179.6 billion KRW (an average of 250,000 KRW per case), including accrued interest, starting from the 18th.

The largest share of the refund amount was from mutual finance institutions, including Saemaeul Geumgo, accounting for 52.0%. This was followed by banks (32.2%), savings banks (9.2%), specialized credit finance companies (6.4%), and insurance (0.3%). By industry, the order was ▲real estate (20.9%) ▲wholesale and retail trade (20.6%) ▲construction (8.3%) ▲accommodation and food services (7.1%) ▲manufacturing (5.2%).

The refund targets are individual business owners or small and medium-sized enterprises that took out loans using their own real estate as collateral for business purposes within the past five years. However, even if the National Housing Bond maturity (5 years) has passed, refunds can be received within 10 years from the loan date. Applicants must submit identification and National Housing Bond purchase receipts to prove the purchase at that time.

Financial institutions that handled the loans will collectively notify eligible customers via text messages and other means starting from the 18th. Additionally, a dedicated consultation center will be established to handle customer inquiries.

Borrowers seeking refunds must visit branches in person. Banks allow refund applications at all branches, but mutual finance institutions require applications to be submitted to the original lending cooperative (Geumgo). Upon application, eligibility and estimated refund amounts can be confirmed.

Customers who did not receive notification messages can also apply by presenting identification and National Housing Bond purchase receipts or other evidence. Refunds will be deposited into the customer's requested account within five business days.

A Financial Supervisory Service official stated, "We will monitor the progress to ensure smooth refunds and continuously check refund performance," adding, "Financial companies have improved internal procedures to prevent recurrence and will provide a 'one-stop service' to avoid customer inconvenience."

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