- HF raises the Guarantee limit for its Jeonse Guarantee products
HF raises the Guarantee limit for its Jeonse Guarantee products
- The current limit of KRW 200M is raised from Oct 11, to reduce the residential cost burden
Korea Housing Finance Corporation(HF, CEO Choi Joon Woo) announced on Oct 7 that in order to relieve residential cost burden on the low-to-moderate income households and end-users, it will raise the Jeonse guarantee limit from KRW 200M to KRW 400M. The decision is made in accordance with the “Stable Livelihood Policies in the Finance Sector; Plans & Progress Update”, announced in July by the Financial Services Commission (FSC).
The measure also reflects the consistent increase of Jeonse prices over time, allowing tenants with less than KRW 700M Jeonse deposit in Seoul and Metropolitan areas (KRW 500M in local areas) to apply for HF Jeonse Deposit Guarantee within the Max. KRW 400M from Oct 11.
* An actual guarantee limit for an applicant is subject to the amount of deposit, annual income and debts of the applicant, and other circumstances including applicability of other Jeonse deposit product.
The guarantee limit raise applies to General Jeonse Guarantee and Collective Jeonse Guarantee products. To be noted, the increase only applies to those with non-homeownership, and where an applicant and spouse own a house, the current guarantee limit of KRW 200M still stands. In addition, the Compact Jeonse Guarantee and Special Guarantee products, of which limit is set aside, are excluded from the measure.
* The partial guarantee rate of the general(special) Jeonse Loans Guarantee products is 90% of the loan.
(ex: In case of Jeonse Loans of KRW 300M from banks, the HF Jeonse Loan Guarantee covers KRW 270M.)
In addition, where guarantee amount exceeds KRW 200M, preservation of claim measures* need to be taken.
* Include establishment of the right of pledge or transfer of the repayment claim to HF, etc. to ensure lease deposit is returned to HF at the time of the lease expiration.
HF CEO Choi said, “We hope that the Jeonse Loan Guarantee limit raise will help to alleviate the residential cost burden on the low-to-moderate income households and end-users. Going forward, we will do our utmost to improve policies and products to better support them.”