Gyeonggi Province Proposes Exclusive Loan Program for Nation's First Equity Accumulation Housing to Central Government

The Gyeonggi Provincial Government announced on May 29 that it has formally proposed to the central government the launch of exclusive low-interest loan and guarantee products for buyers (allottees) of “equity accumulation housing,” a program being promoted for the first time in the country.

The Gyeonggi Provincial Government plans to supply 240 units in Block A17 of Gwanggyo New Town as equity accumulation housing in the second half of this year.

Equity accumulation housing is a type of public housing in which buyers gradually increase their ownership share over 20 to 30 years, much like building a nest egg with regular savings deposits, ultimately securing full ownership of their home.

Unlike conventional sales housing, where the purchase price is paid in full at the time of occupancy, equity accumulation housing allows payments to be made over 20 to 30 years, reducing the initial financial burden. The Gyeonggi Provincial Government and Gyeonggi Housing & Urban Development Corporation (GH) are promoting this initiative to provide housing stability opportunities for young people and newlyweds without homes who lack substantial initial capital.

The issue is that, since there is no precedent for equity accumulation housing supply in Korea, there are no dedicated loan products available for buyers to use in acquiring their shares.

Gyeonggi Provincial Government

To address this, the Gyeonggi Provincial Government recently submitted an official request to the central government and policy financial institutions (HUG) for the creation of new exclusive low-interest loan products utilizing the Housing and Urban Fund, as well as the introduction of shared equity collateral loan guarantee products through the Housing and Urban Guarantee Corporation. If policy financial institutions (HUG) offer such guarantees, buyers will also be able to obtain loans from commercial banks.

Earlier, on May 27, Gyeonggi Housing & Urban Development Corporation signed a “Financial Business Agreement for Equity Accumulation Housing” with Woori Bank, proactively moving to develop its own financial products. This means that Woori Bank plans to independently supply financial products for equity accumulation housing buyers without a government guarantee, with a launch scheduled for the second half of this year.

Tae Soo Kim, Director of Housing Policy at the Gyeonggi Provincial Government, stated, “The launch of loan products for equity accumulation housing will lower the financial barriers for housing support to people without homes and help alleviate the actual housing cost burden,” adding, “We will continue our efforts to stabilize the housing market by expanding housing supply centered on real demand.”

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