HF Leads Efforts to Promote Social Housing and Co-Housing  

- HF set to assist social enterprises in their housing projects through an MOU with SH, SGI, and KEB Hana Bank 
- HF offers loan guarantee of up to 90%

Korea Housing Finance Corporation (HF, CEO Lee Jung-Hwan) announced on April 6, 2018, that it reached a memorandum of understanding (MOU) with Seoul Housing & Communities Corporation (SH), Seoul Guarantee Insurance Company (SGI), and KEB Hana Bank to promote and facilitate the provision of social and community housing.

The MOU aims to provide the financial aid necessary for the construction of ‘social housing*’ and ‘co-housing**’ projects undertaken by Seoul Metropolitan Government and to build close partnerships in the area of providing loans, loan guarantees, and insurance so as to help social cooperatives and other social businesses grow into full-fledged housing providers or operators.    
  * Social housing: Neither private nor public rental housing offered by social businesses (including housing cooperatives, social enterprises, or non-profit organizations) to make a limited profit
  ** Co-housing: A new type of housing created to promote a sense of community. Composed of multiple separate units and community spaces, co-housing has its own regulations by which residents solve internal or external issues through communication.

In order to make it easier and more affordable for social businesses to secure funding for their housing projects, HF will ▲ exclude their housing construction and project management records from its review process, ▲ lower its guarantee fees down to as low as 0.1% per annum, ▲ raise its loan guarantee to cover up to 90% of their housing project cost, and ▲ raise its Jeonse guarantee to up to 90% for the lessees of social housing and co-housing units.

HF CEO Lee Jung-Hwan said, “For low-income people having a hard time finding housing, HF will continue to expand and improve these measures to ensure that they no longer have to worry about moving and rental costs and can find better and affordable housing and that social housing and co-housing become new housing options. We will work further to expand this to other cities.”

At the same time, KEB Hana Bank, one of the signatories to the MOU, is going to offer these housing projects a 10-year or longer loan at an annual interest rate of 3.4%. Out of the 3.4% interest rate, up to 2% will be covered by Seoul Metropolitan Government to ease the interest burden on borrowers. In addition, Seoul Guarantee Insurance Company will guarantee the full return of the rental deposit in the case that the lessee of a social housing or co-housing unit has difficulty getting the deposit back from his or her landlord. Seoul Housing & Communities Corporation will address matters relating to managing social housing and co-housing projects initiated by Seoul Metropolitan Government, such as project manager selection and project management and consultation.

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(From left to right) SGI President Kim Sang-Taek, SH CEO Kim Sei-Yong, HF CEO Lee Jung-Hwan, and Senior Managing Director Park Ji-Hwan of the Credit Group of KEB Hana Bank signed an MOU on financial support for social housing and co-housing at SH Headquarters on the 6th.