KHFC Committed to Ease the Housing Expense of Low-income Households

People who have failed to make loan payments and wind up with the lowest credit ratings have virtually no way to obtain a loan. But hereinafter, they may take advantage of KHFC’s guarantee and take out a loan from banks.

At the press conference marking his 1^stanniversary in office, CEO Joo-jae Lim of KHFC said on July 23 that KHFC plans to assist low-income families with such a measure.

He said, “We will focus on reducing the burden on families by reducing the guarantee fee for the housing finance credit guarantee product that many low income households use. Even if you are Class 10 under the Credit Scoring System due to the history of delayed payments to financial institutions and are denied guarantee, we plan to provide guarantees depending on the individual ability to make repayments in the future.” In such case, KHFC expects to see some 10,000 people with low credit ratings – more than half of those who fall under CSS Class 10 – to benefit from the product. This KHFC product enables those without a home to take out a loan for jeonse or intermediate payments for apartment units without having to offer separate collateral or joint guarantee.This product opens the door for those people with the lowest credit ratings who could not even get a guarantee to obtain a loan from banks. 

Furthermore, KHFC plans to ease the burden on those who seek to buy apartment units in regions other than the Seoul Metropolitan Area by reducing the intermediate payment guarantee fee by more than 30%, from 0.5% to 0.33%, for those apartments built by small to medium construction firms that are outside the range of the top 100 builders.

Lim said, “In the case of those builders whose ranking is low and are located outside the Seoul Metropolitan Area, buyers tend to pay higher guarantee fees for the intermediate payments because of the credit ratings of the builders. We are aware of the difficult economic situation and we plan to lower the fee.” Furthermore, he said KHFC will continue to improve its programs to be more customer oriented and to develop new products that meet market demand by, for example, offering preferential guarantee products for low-income couples who have been married less than 5 years. 

He also said, “We will reduce the interest rate by simplifying the loan process and reducing management costs. This can be done by introducing an online automatic evaluation system for Bogeumjari loans. KHFC plans to undertake post-management tasks for some of the bonds that are now handled by financial institutions so that the management costs can be reduced.”

“It has been 2 years since the JTYK reverse mortgage was first launched. For this product, we plan to lower the minimum age and increase the loan ceiling. We have improved this product overall and it was rewarding to lay the groundwork for providing a safety net for senior citizens,” he added. After looking back on the accomplishments achieved during the past year, he assured that “KHFC is dedicated to providing the support that low-income households need in today’s climate of economic recession.”