Financial Services Commission Chairman Choi Jong-ku and commercial bank presidents hold an agreement on jeonse and monthly rent loans tailored to meet youth’s need after signing it at the Korea Federation of Banks building in downtown Seoul on May 22. (Photo: FSC)

Korea Housing-Finance Corp. (HF) is a state-run entity designed to offer facilitate stable housing to low-income families and the underprivileged and support the vitalization of housing funds. HF is offering special programs targeting “rookie starters into society,” also known as newlywed couples, families with multiple children, one parent households, and low-credit, low-income families.

One of HF’s representative financial products is a jeonse, or lump-sum rent, loan tailored to meet youth’s need.

HF recently launched the program in cooperation with the Financial Services Commission (FSC) and commercial banks.

The project offers loan targeting youth aged between 19 and 34. Young couples with less than 70 million won in combined income are allowed to borrow a maximum of 70 million won at an annual average interest rate of about 2.8 percent, with a maturity of two years to three years. Youth are allowed to borrow 12 million won for two years or 500,000 won monthly as monthly rent.

An average interest rate of the monthly rent loan is about 2.6 percent.

Households living in half-jeonse and half-monthly rent houses are allowed to lend money on key money for jeonse and monthly rent.

The cap of the loan is a maximum of 6 million won for two years. Applicants with less than 500 million won (less than 300 million won in provincial areas) or less than 100 million won in guarantee money for monthly rental or less than 700,000 won in monthly rental are qualified.

Providing financial support for rookie starters into society is designed to enhance the sustainability of the national economy.

The financial support product allows one parent households who find it hard to get loans due to low credit and low income to receive a discount of 0.1 percentage point in a guaranteed fee and a maximum of 0.25 percentage points in an interest rate for jeonse loans.

The latest financial support loan applies the lowest guaranteed fee rate of 0.05 percent for jeonse loans.

Would-be beneficiaries include those who receive financial support to restore their credit, the underprivileged, and low-income earners using policy financial support instruments.

About HF

Established on March 1,2004, Korea Housing Finance Corporation (HF) is a state-run enterprise that facilitates the long-term, stable supply of housing funds and other related instruments, theresby promoting national welfare and developing the economy.

Committed to serving as a trusted partner for low-and middle-income families, HF has wide-ranging housing finance operations including the supply of Bogeumjari Loan and Confirming Loan, the issuance of credit guarantees for housing finance and reverse annuity mortgages (Joo Taek Yeon Keum), and the securitization of mortgage-backed claims and other instruments.