Investment fund limits in KHFC’s MBS & MBB raised

- Limit increased from 10 to 30 percent of total assets

- Up to 100 percent of total assets for real estate funds

Funds investing in KHFC’s mortgage-backed securities (MBS) and mortgage-backed bonds (MBB) saw their limits go up from 10 percent to 30 percent of the funds’ total assets (100 percent for real estate funds).

The Korea Housing Finance Corporation (KHFC, CEO Seo Jong-dae) announced that the increased limit comes as a result of a revision to the Enforcement Decree of the Financial Investment Services and Capital Markets Act (FSCMA) on June 29.

“The revision to the Enforcement Decree of the FSCMA will likely result in increased demand for investment by securities companies and investment trust companies,” said a KHFC official. “This will lead to more low-interest, long-term, fixed-rate mortgage loans as KHFC’s financing rate will go down.”

As of the end of May, KHFC issued a total of 45 trillion won in MBSs and MBBs. Major investors are banks (36.8%), insurers (32.7%), and pension funds (12%).