HF Helps Reduce Debt Burdens and Support Economic Recovery with Inclusive Finance

- Strengthens Benefits for Customers Who Make Good-Faith and Active Repayments of Housing Guarantee Subrogation Claims

- Provides Tailored Debt Adjustment Support for Jeonse Fraud Victims, Young People, and Small Business Owners

Korea Housing Finance Corporation (HF, CEO Kim Kyung-Hwan) announced on the 28th that it will conduct a Special Housing Guarantee Debt Adjustment Campaign (hereinafter referred to as the “Campaign”) from July 30 to November 30 to support the recovery of customers whose debts, such as jeonse loans, were repaid by HF to financial institutions on their behalf.

The Campaign is focused on providing more substantial debt relief and helping customers return to economic activity sooner by expanding incentives for customers who make good-faith and active repayments and strengthening support for jeonse fraud victims and socially vulnerable groups.

Strengthening Benefits for Good-Faith and Active Repayers to Support Faster Recovery

Customers who have entered into an installment repayment agreement for subrogation claims* and have repaid at least 10% of the agreed amount will receive a 25% reduction in the principal of their subrogation claim at the time of the agreement if they wish to repay their remaining debt in full during the Campaign period.

* Claims that HF is entitled to recover from customers after repaying their debts to financial institutions on their behalf

Customers who actively repay their debts and apply for debt adjustment within three years of the date of subrogation repayment** will receive a 10% reduction in the principal of their subrogation claims. In addition, HF will expand the eligibility for its existing incentive program for written-off claims*** from customers who have made good-faith repayments for at least one year to those who have done so for at least six months. The maximum reduction will also be significantly increased from 13% of the remaining installment payments to 20% of the initial installment agreement amount.

 ** The date on which HF repaid the debt to the financial institution on the customer's behalf

*** Non-performing claims recognized as an accounting loss because recovery from the customer is expected to be difficult 

Preferential Principal Reductions and Debt Settlement Support for Jeonse Fraud Victims

HF currently operates a special interest-free debt adjustment program of up to 20 years to support jeonse fraud victims. During the Campaign period, victims who are already making installment repayments will receive a 35% reduction in principal if they repay their remaining debt in full.

In addition, for cases where a spouse or other party has provided a joint guarantee to obtain preferential treatment for the jeonse guarantee limit, the joint-guarantee debt relationship will be terminated immediately once the amount equivalent to the preferentially increased guarantee limit has been repaid, helping victims make a quicker economic recovery.

Tailored Debt Reduction for Young People, Small Business Owners, and Multi-Child Households

HF will provide an additional reduction of up to 30 percentage points on the existing principal reduction rate for customers with written-off claims who are young people, small business owners, or borrowers with small-scale debts, while raising the maximum reduction rate from 70% to 80%. In addition, for multi-child households among socially vulnerable groups that are eligible for a 70% principal reduction, the eligibility requirement will be eased from households with at least two minor children to those with at least one minor child, including an unborn child, further reducing their financial burden.

HF CEO Kim Kyung-Hwan said, “This Campaign was launched to help customers who remain committed to repaying their debts, as well as jeonse fraud victims, young people, small business owners, and other socially vulnerable groups, recover their credit more quickly amid challenging economic conditions,” adding, “As an institution supporting low- and moderate-income households, HF will continue to actively implement inclusive finance and fulfill its social responsibilities.”

Inquiries regarding debt adjustment for housing guarantee subrogation claims can be made through HF’s customer service center (1688-8114). Applications can be submitted in person at the relevant HF branch, through HF’s website(www.hf.go.kr), or via the Smart Housing Finance mobile app.