HF Expands Jeonse Guarantee Support for Newlyweds & Young Adults

- To provide more support for newlyweds and young adults in the city in reducing residential costs 

 - More loan limit with less interest, in collaboration with Busan Metropolitan city and BNK Busan Bank

Korea Housing Finance Corporation (HF, CEO Choi Joon Woo) announced on August 18 that it signed MOUs with Busan Metropolitan City government (Mayer Park Heong Joon), and BNK Busan Bank (Executive Director Ahn Kam Chan), in order to expand the Jeonse Loan Guarantee support for newlyweds* and young adults** with non-homeownership in the city. (Photo Attached) 

With the MOUs, the loan limit for newlyweds under the Compact Jeonse Guarantee is expanded to KRW 200M, a KRW 50M increase from the previous limit of KRW 150M. In addition, the Busan Bank lowers the loan interest rates to around 1.5%, whereas the Busan Metropolitan City government reimburses the loan interest up to 1.5%p annually. Accordingly, eligible newlyweds can take out Jeonse loan practically for interest-free. Compared with the previous program, the interest burden sets to be lowered by from 0.3% to 0.8% point. 

The support for Compact Jeonse Guarantee for young adults in Busan city is also strengthened. The loan limit sets at KRW100M, a KRW 70M increase from previous KRW 30M. In addition, the guarantee limit also increases from 80% to 90% of the lease deposit. The Busan Banks lowers the interest rate to around 1.5% and the Busan Metropolitan City government reimburses the loan interest up to 1.5%p annually, allowing young adults to take out Jeonse loan with virtually no interest burden as newlyweds on Compact Jeonse Guarantee.

With the MOUs for Compact Jeonse Guarantee support program expansion, HF now sets to provide guarantee for 100% of Jeonse loan for young adults and newlyweds in the city, along with the increased guarantee limit at the minimum guarantee fees (0.02%). 

To be noted, as the product involves financial support from the Busan Metropolitan City government, borrowers should maintain eligibility requirements not only at the time of application but throughout the loan period. More information on the program eligibility is available at the Busan Metropolitan City government official websites*, on the project disclosure post. 

 * (Newlyweds) Busan ChildCare Together (www.busan.go.kr/childcare), (Young Adults) Busan Young Adults Platform(www.busan.go.kr/young)

The enhanced Busan Metropolitan City government newlyweds Compact Jeonse Guarantee receives application from BNK Busan bank branches from Sep 16, and after the deliberation process, the loans will be available from Oct. In addition, Busan Metropolitan City government Young Adults Compact Jeonse Guarantee plans to start application process in Sep on the “Busan Young Adults Platfrom” website. Those eligible for the program will be able to take out loans from Oct after deliberation process by Busan Metropolitan City government and Busan Bank. 

HF CEO Choi commented, “Through the MOUs, HF will support young adults and newlyweds to have residential stability and a renewed hope for the better future. To provide more inclusive finance for young adults and newlyweds, HF will continue to seek cooperation with local governments.”

HF has provided the Jeonse and monthly rent guarantee products in related MOUs with total 18 local governments (11 metropolitan and 7 municipal governments and counties). From 2017 to July 2021, the total accumulated supply of the guarantees amounts to est. KRW 7.8 trillion, with the average guarantee amount of KRW55M and KRW159M for young adults and newlyweds respectively.