Resolving Financial Barriers to Housing Supply... 'PF Financial Support Center for Issue Resolution' to Launch Next Month

FSS Expands PF Support Center for Financial Issue Resolution
KDB Establishes New Financial Channel for Construction Companies
11 Follow-up Tasks from August 13 Policy to Be Prioritized

The Financial Supervisory Service will expand and reorganize the existing Real Estate Project Financing (PF) Support Center into the 'PF Financial Support Center for Issue Resolution', which will begin operations next month. The goal is to swiftly resolve financial issues at residential construction sites to support housing supply and stabilize home prices.

The Financial Services Commission and the Ministry of Land, Infrastructure and Transport held the 'Finance and Construction Industry Regular Meeting Kickoff' on August 28 to discuss: the progress of the August 13 real estate financial policy, support measures to restore the private housing supply ecosystem, and solutions to financial difficulties related to PF and construction companies.

Kwon Daeyoung, Vice Chairman of the Financial Services Commission, stated during the meeting, "This will serve as the starting point for solving the pressing social issue of a housing supply cliff through active communication between the financial sector and the construction industry," and added, "The government will continue to spare no institutional support to promote housing supply."

On this day, the Financial Supervisory Service and Korea Development Bank each announced plans to establish channels for addressing financial difficulties as follow-up measures to the August 13 Comprehensive Financial Measures. First, the Financial Supervisory Service will reorganize the Real Estate PF Support Center, established in April 2023, as the PF Financial Support Center for Issue Resolution. The center will feature an overall support team acting as the control tower and specialized teams for evaluation and management, syndicated loans, and institutional improvement. When a financial issue is reported, the Financial Supervisory Service will address it directly or refer it to institutions such as Korea Housing Finance Corporation, Korea Asset Management Corporation (KAMCO), or financial industry associations for resolution.

Korea Development Bank will set up a Financial Support Center for Construction Companies to serve as a centralized channel for receiving financial concerns from the construction sector. For matters that are difficult to resolve internally, the bank will request a review from financial industry associations, which will then communicate these concerns to individual financial institutions. While the Financial Supervisory Service acts as the control tower linking related agencies to resolve issues across all PF project sites, Korea Development Bank's center will focus specifically on supporting construction companies with financial challenges such as securing funds. Both centers will commence operations on the first day of next month.

The Financial Services Commission also reviewed enhanced financial support measures aimed at accelerating the housing supply, as part of the August 13 measures. Out of a total of 20 tasks, the commission will prioritize implementing 11 tasks that can be pursued in August and is also working to secure funding for the KAMCO fund and to amend the Korea Housing Finance Corporation Act. The commission requested that financial institutions actively cooperate in restructuring syndicated loans and in setting up additional sector-specific funds.

The Ministry of Land, Infrastructure and Transport explained that the passage of six legislative projects related to the September 7 policy package at the National Assembly's plenary session on August 20 had laid the foundation for not only expanding but also accelerating housing supply. In addition, the ministry plans to promptly implement follow-up actions so that improvements from the August 13 measures can be quickly applied on-site. To revitalize the private housing market, which has faced contraction, the ministry will also support easing related regulations.

Given that financial challenges persist on the ground, the Ministry of Land, Infrastructure and Transport requested cooperation from the financial sector to ensure that funds can flow smoothly to new construction projects, which have significant effects on economic growth and job creation. In response, the five largest banks, securities firms, and other private financial institutions present at the meeting said, "We agree with the government's intent to promote housing supply, and the financial sector will also make active efforts to provide adequate funding to ensure there are no disruptions in the housing supply."

Kim Itak, the First Vice Minister of Land, Infrastructure and Transport, said, "To expand the housing supply, we will continue to cooperate with the financial sector to quickly implement institutional improvements and ensure that funding reaches actual supply sites without delay."

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