Korea Housing Finance Corporation Expands Construction PF Guarantees to 4 Trillion Won to Strengthen Support Against Middle East Risks

Korea Housing Finance Corporation will significantly increase the scale of policy financing to support construction sites experiencing liquidity difficulties due to the prolonged instability in the Middle East.

On April 16, Korea Housing Finance Corporation announced that, starting from April 20, it will implement measures to support the construction industry, including reducing guarantee fees for business guarantees, expanding the supply of special guarantees, and extending their duration. These measures are a follow-up to the 'Construction and Financial Industry Joint Meeting' presided over by the Prime Minister on April 8.

The key point is to raise the supply limit for Construction Cost Plus PF Guarantees from the current 2.5 trillion won to 4 trillion won. The aim is to increase liquidity support for projects requiring additional funds due to rising construction costs, thereby minimizing construction delays and disruptions. In addition, the guarantee fee rate for business guarantees will be reduced by 30 percent. This reduction will be applied temporarily for one year and is expected to directly lower the financial costs for construction companies.

The operating period for special guarantees will also be extended. The period, originally set to end on June 30 this year, will now be extended to December 31 in order to minimize any gaps in support. The Construction Cost Plus PF Guarantee is a system that supports new PF projects and existing projects with approved guarantees that require additional funding due to construction cost burdens, despite being otherwise viable. For sites in need of normalization due to contractor insolvency, funding will also be provided through special guarantees. Kim Kyunghwan, CEO of Korea Housing Finance Corporation, said, "These measures will help normalize construction sites experiencing difficulties due to the situation in the Middle East," adding, "As a policy financial institution, we will continue to identify challenges in the construction industry and expand necessary support."

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