GH Opens Path for Equity Accumulation-type Housing Loans... Signs Agreement with Woori Bank on the 28th

Gyeonggi Housing and Urban Corporation (GH) has partnered with Woori Bank to provide financial support for equity accumulation-type housing sales.

On May 28, GH announced that it had signed a "Financial Business Agreement for Equity Accumulation-Type Housing Sales" with Woori Bank at the bank's headquarters in Jung-gu, Seoul, to address the issue of financing for homebuyers. As a result, the uncertainty surrounding loan products—which had been the greatest obstacle to the equity accumulation-type housing project—has been resolved, creating a more stable environment for housing supply.

According to the agreement, the two organizations plan to complete the development of a dedicated loan product before the announcement of the first equity accumulation-type housing sales for "Gwanggyo A17 Block," scheduled for October. In particular, they are closely discussing measures such as applying preferential interest rates and introducing a dedicated loan system to ease the financial burden on homebuyers, with detailed information to be provided in future sales announcements.

The Gwanggyo A17 Block housing project consists of 600 units in total, with 240 of these supplied as equity accumulation-type units.

The equity accumulation-type housing sales model, supplied domestically for the first time by GH, is an innovative sales structure in which buyers initially acquire only a portion (10–25%) of the ownership stake and then purchase the remaining shares over a period of 20 to 30 years. Due to the unique characteristic of shared ownership between buyers and the public supplier, these homes could not be recognized as collateral under the existing mortgage loan structure, making it impossible to develop dedicated loan products.

Kim Yongjin, President of Gyeonggi Housing and Urban Development Corporation (left), is taking a commemorative photo with Chung Jinwan, President of Woori Bank, after signing an agreement at Woori Bank’s headquarters in Jung-gu, Seoul on the 28th. Provided by Gyeonggi Housing and Urban Development Corporation

To resolve this, GH devised a new type of loan product based on bond transfer and continuously pushed for institutional improvements with the National Assembly, the Ministry of Land, Infrastructure and Transport, the Prime Minister's Office, and the Financial Services Commission. As a result, earlier this month, GH obtained a final legal interpretation from the financial authorities, establishing a legal foundation for loan implementation. This is regarded as a representative example of regulatory innovation, as GH proactively overcame supply obstacles that exceeded the limitations of local public corporations.

At the time of introducing the system, GH also newly established "youth" and "newborn" categories within the special supply system for equity accumulation-type housing. GH further proposed a significant increase in the special supply quota from the previous 50% to 70% of total units, and the legislative notice for this proposal has now been completed. With the financial support framework now in place through this agreement, it is expected that a practical and groundbreaking housing ladder will be provided for young and genuine homebuyers.

With a stable supply environment secured, GH plans to expand the supply of equity accumulation-type housing to around 1,000 units annually throughout Gyeonggi Province, starting with Gwanggyo and focusing on the upcoming third-generation new towns.

GH President Kim Yongjin stated, "This agreement is significant in that it eliminates the uncertainty of financial support for equity accumulation-type housing and establishes a stable supply environment. Going forward, we will continue to discover innovative housing models that lead to residential stability for low-income, non-homeowning citizens."

This content was produced with the assistance of AI translation services.