HF Joins Efforts with SH and KB Bank to Address Housing Shortage for Young People

 - HF provides housing providers with annual guarantee fees

as low as 0.1% and guarantees of up to 70% of their project loan
 - KB Bank offers a fixed annual rate of as low as 3.15%
 - SH enhances the stability of housing projects through pre- and post-project management

Korea Housing Finance Corporation (HF, CEO Kim Jae-Chun) joins forces with Seoul Housing & Communities Corporation (SH, CEO Byeon Chang-Heum) and Kookmin Bank (KB Bank, CEO Yoon Jong-Gyu) to address the housing crisis facing today’s young people <See the image below>.

On the 19th, HF signed a memorandum of understanding (MOU) with SH and KB Bank to provide financial support to housing projects for young adults.

This MOU aims to offer financial aid to the Seoul REITs, part of the 2030 Housing Project for Young People launched by the Seoul Metropolitan Government to aid young adults in their 20s and 30s who are directly affected by the rapidly rising housing prices as well as other rental housing projects for young people. Under the MOU, HF, SH, and KB Bank will establish a close partnership to offer financial assistance for the rental housing projects.

Pursuant to the MOU, HF will provide such projects with annual guarantee fees as low as 0.1% and guarantees of up to 70% of their cost, and will also offer the projects financial counseling in partnership with KB Bank.

At the sam time, KB Bank will provide the rental housing projects with loans at a fixed annual interest rate of 3.15%, lower than that of other housing loans, and leverage its financing expertise to help better execute the 2030 Housing Project for Young People, thereby promoting housing stability for young adults.

SH will work to improve project stability through project management during the Project’s design and construction phase as well as provide rental housing management and consigned management of rental houses after the completion of the Project. It will also pursue joint investments with private-sector housing providers to expand the supply of rental housing units for the younger generations.  

The key beneficiaries of the 2030 Housing Project for Young People, launched to provide rental housing units near transit for young people, are college students, newly hired graduates, and newlywed couples. Public rental housing units* are offered at 60 to 80% of their market price, while quasi-public rental housing units** are offered at a price lower than their market value after consultation between the Seoul Metropolitan Government and rental housing providers and counseling by the Project Operations Advisory Committee. 
     *  Public rental housing units (provided by the Seoul Metropolitan Government and SH): Units less than 45㎡ in net floor space
     **  Quasi-public rental housing units (provided by private housing providers): Units less than 60㎡ in net floor space for an 8-year mandatory rental period

An HF official said,“HF will work closely with the other two institutions to ensure a stable supply of housing units for young adults and vulnerable social groups.”

[Image Description]

Korea Housing Finance Corporation CEO Kim Jae-Chun (left) signed a memorandum of understanding with SH CEO Byeon Chang-Heum (middle) and KB Bank CEO Yoon Jong-Gyu (right) at the KB Bank headquarters in Yeouido, Seoul, on the 19th. The MOU aims to offer financial assistance to housing projects for young adults.