Early-Stage Project Costs Financed at 1% Annual Interest... Special Promotional Loan Product for Redevelopment Projects Gains Popularity

Special Promotional Loan Product Introduced by the Ministry of Land
130 Billion Won Raised for Projects in Seoul Metropolitan Area and Busan

On May 20, the Ministry of Land, Infrastructure and Transport announced that its 'Special Promotional Loan Product for Early-Stage Project Costs in Redevelopment and Reconstruction Projects,' which is operated to support redevelopment and reconstruction committees and associations nationwide struggling with initial funding, has been receiving a strong response at project sites.

This product was introduced last year to provide low-interest funding in order to ease the financial burden on redevelopment projects and enable swift project progress. Since the launch of the special promotional product in March last year, committees and associations have been actively making inquiries for consultations.

The special promotional product offers an annual interest rate of 1% and applies a guarantee fee rate of 0.2–0.4% by the Korea Housing & Urban Guarantee Corporation (HUG). The product is only available for projects that complete their application and approval by December 31. Applications after this date will be subject to the basic conditions of the standard product.

According to HUG, which is handling consultations, approximately 13 billion won in support has been approved for project sites in Seoul (2 locations), Gyeonggi Province (2 locations), and Busan (1 location). In addition, applications and consultations are actively underway at around 50 sites nationwide.

A representative from a redevelopment committee in Seoul stated, "The launch of the fund product allowed us to resolve difficulties smoothly thanks to the low policy interest rate." A representative from a reconstruction association in Busan also added, "With the funding issue resolved, we expect that the previously delayed administrative procedures can now proceed at a faster pace."

The Ministry plans to continue offering the product until this year’s project budget of 42.25 billion won is exhausted. Yoon Youngjung, Director of Housing Maintenance Policy at the Ministry, said, "This special promotional product will not only enhance transparency in project funding but also provide practical help in accelerating project progress," adding, "We will continue to provide the necessary support to further vitalize redevelopment and reconstruction projects in the future."

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