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 its existing real estate project financing (PF) Support Center into the "PF Financial Difficulty Resolution Center," which will go into operation next month. This aims to quickly resolve financial obstacles at housing construction sites, thereby supporting housing supply and contributing to the stabilization of housing prices.

Daeyoung Kwon, Vice Chairman of the Financial Services Commission (right), attended the "Financial and Construction Industry Regular Meeting Kickoff" held on the morning of the 28th at the Government Complex Seoul in Jongno-gu, Seoul, to discuss the PF and Construction Company Financial Difficulty Resolution Centers. Financial Services Commission

The Financial Services Commission and the Ministry of Land, Infrastructure and Transport held the “Regular Financial and Construction Industry Meeting Kickoff” on August 28, where they discussed the status of the August 13 real estate finance measures, support plans to restore the private housing supply ecosystem, and solutions for PF and construction company financial difficulties.

At the meeting, Kwon Daeyoung, Vice Chairman of the Financial Services Commission, stated, “Through active communication between the financial sector and the construction industry, this meeting will serve as a starting point to resolve the pressing social issue of the looming housing supply shortage. The government will continue to provide institutional support to further promote housing supply.”

On the same day, the Financial Supervisory Service and the Korea Development Bank both announced plans to establish their own channels to address financial difficulties as follow-up measures to the August 13 Comprehensive Financial Measures. First, the Financial Supervisory Service will reorganize its Real Estate PF Support Center, established in April 2023, into the PF Financial Difficulty Resolution Center. The center will include a general management team functioning as a control tower, along with teams in charge of evaluation and management, syndicated loans, and institutional improvements. When financial concerns are reported, the Financial Supervisory Service will handle them directly or refer them to the Korea Housing Finance Corporation, Korea Asset Management Corporation (KAMCO), or relevant financial industry associations for resolution.

The Korea Development Bank will establish a Construction Company Financial Difficulty Resolution Center, serving as a centralized contact point for the construction industry’s financial concerns. Issues that are difficult to resolve independently will be referred to financial industry associations for review, and the associations will relay these concerns to individual financial institutions. While the Financial Supervisory Service acts as the control tower, coordinating the resolution of PF project-level difficulties in collaboration with related organizations, the Korea Development Bank will serve as the dedicated channel for financial issues related to funding for construction firms. Both centers are scheduled to begin operations on the first day of the next month.

The Financial Services Commission also reviewed measures to strengthen financial support for promoting housing supply, which were included in the August 13 measures. Of the total 20 tasks, the commission will first implement 11 tasks that can be undertaken in August, and will push ahead with securing the KAMCO Fund budget and amending the Korea Housing Finance Corporation Act. The commission also asked the financial sector to actively cooperate in the reorganization of syndicated loans and in the creation of additional self-managed funds by business type.

The Ministry of Land, Infrastructure and Transport explained that, as of August 20, six legislative tasks of the September 7 measures had passed the National Assembly’s plenary session, thus laying the groundwork for expanding and accelerating housing supply. The ministry also said it would carry out follow-up actions so that institutional improvements from the August 13 measures can be applied promptly in the field. Measures will be taken to relax regulations and otherwise support the private housing market, which has seen declining supply, in order to revitalize it.

Since financial difficulties are still ongoing at supply sites, the Ministry of Land, Infrastructure and Transport requested the financial sector’s cooperation to ensure that sufficient funding is supplied smoothly to new construction projects, which are vital to economic growth and job creation. In response, major commercial banks, securities firms, and other private financial institutions attending the meeting stated, “We understand the government’s intention to stimulate housing supply and will do our utmost to provide ample financial support so that there is no disruption to the supply of housing.”

Kim Itak, 1st Vice Minister of the Ministry of Land, Infrastructure and Transport, said, “In order to expand housing supply, we will continue to swiftly improve systems and work closely with the financial sector to ensure that sufficient funds are supplied in practice to the actual supply sites.”

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