Single-Homeowners in Public Redevelopment Areas Eligible for Up to 6 Million Won Annual Support for Relocation Loan Interest

Interest Subsidies Extended from Project Loans to Resident Relocation Loans

Loan Principal Limit Set at 300 Million Won; Multiple Homeowners Not Eligible

Starting from now, homeowners with a single property in designated public redevelopment areas will be able to receive up to 6 million won annually to offset relocation loan interest payments.

Aerial perspective of the public redevelopment project in Geoyeo Saemaeul district, Songpa-gu, Seoul. Korea Land & Housing Corporation

On October 1, the Ministry of Land, Infrastructure and Transport announced that it has revised the 'Financial Business Agreement on Secondary Interest Subsidies for Public Redevelopment Projects' with the Korea Housing and Urban Guarantee Corporation (HUG), Korea Land and Housing Corporation (LH), Seoul Housing & Communities Corporation (SH), and Gyeonggi Housing & Urban Development Corporation (GH), and will now provide support for relocation loan interest. This benefit will apply not only to the 35 existing public redevelopment sites, but also to newly designated candidate locations.

The secondary interest subsidy is a system where the government uses the Housing and Urban Fund to pay part of the loan interest on behalf of borrowers. Specifically, the government will support up to 2 percentage points for interest rates exceeding 1.8%. Previously, this system was limited to business loans for redevelopment projects. However, the coverage is now expanded to include relocation loans, which are borrowed by actual residents to vacate their homes or return rental deposits to tenants.

The support targets homeowners with a single property who are relocating or need to return a deposit to tenants. Multiple homeowners are not eligible for the benefit. The maximum principal amount for basic relocation loans eligible for interest support is up to 70% of the deposit (such as Jeonse). The loan limit per rights holder is 300 million won.

For example, if an individual borrows 300 million won at an annual interest rate of 4.8%, the government will subsidize interest equivalent to 2 percentage points. This reduces the annual interest payment from 14.4 million won to 8.4 million won. If the same loan amount and interest rate are maintained for three years, the borrower can save a total of 18 million won, or 6 million won per year.

Improvements to Secondary Loan Interest Support for Public Redevelopment. Ministry of Land, Infrastructure and Transport

The support applies to loans provided by financial institutions that handle HUG-backed loan guarantees. This includes commercial banks, regional banks, the Korea Development Bank, the National Agricultural Cooperative Federation, and the National Federation of Fisheries Cooperatives, among others. The subsidy period runs from the date the loan is originated until the end of the move-in designation period (60 days).

Yoon Youngjung, Director of Housing Maintenance Policy at the Ministry of Land, Infrastructure and Transport, stated, "A foundation has been laid for residents in public redevelopment areas to ease their interest burden and move out," adding, "We will actively provide support so that housing supply in city centers can become visible as soon as possible."

For more detailed information, including how to apply, residents are encouraged to contact the project operator for each site, which are LH, SH, and GH.

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