President Lee Chae-kwang of HUG.

Jin Woong-seop (10th from left), a senior advisor to HUG poses for those from the Korea Development Institute, HUG and HGF in a briefing session on the Knowledge Sharing Program (KSP) in the headquarters of Kazakhstan’s HGF on Jan. 8. (Photos: HUG)

Korea Housing & Urban Guarantee Corporation (HUG) announced on Jan. 30 that it reduces the period it takes to apply for housing guarantees in connection with urban redevelopment projects in order to support the government’s housing supply expansion and smoothly promote housing builders’ construction projects.

HUG carries out the guarantee business for housing, including guarantees for housing completion, guarantees for rental deposits and guarantees for cooperative housing completion, among others.

The company supports national policies, including a guarantee for a refund of a Jeonse deposit. National and local governments entrust HUG with businesses such as the entrustment of profit (loss) sharing mortgage programs. HUG is the exclusive operator of National Housing and Urban Fund (NHUF) according to the NHUF Act.

HUG has been running a program where people can apply for housing guarantees after existing buildings on project sites are removed in the case of redevelopment sites in accordance with the government's real estate measures since November 2016.

However, due to the government's real estate policies, the market environment has changed, with stable supply of homes (about 200,000 un its per year). Housing associations and housing construction companies have complained about difficulties such as delays in business and increased costs.

 
Therefore, starting on Jan. 30, it was possible to apply for housing guarantees even before the demolition of existing buildings in connection with redevelopment projects such as reconstruction.

The number of households whose sales guaranteed stood at 400,000 in 2015, 350,000 in 2016, 220,000 in 2017, 180,000 in 2018 and 200,000 in 2019.

“We expect that this improvement of the system will reduce financial burdens on housing construction companies and promote housing supply,” said Lee Chae-kwang, president of HUG. “HUG will support the smooth implementation of the government’s policies on the housing market and housing projects by steadily improving systems.”

HUG will expand the sharing of its experience and know-how in running a housing guarantee system with Kazakhstan through the Knowledge Sharing Program of the Policy Advisory Project.

The KSP Project is a knowledge-based development cooperation project under the Korean Ministry of Strategy and Finance and the Korea Development Institute (KDI) which provides customized policy suggestions to partner countries based on Korea’s rich experience in economic development.

As part of the project, HUG held a KSP project report and conducted a survey in Kazakhstan on Jan. 8.

HUG’s policy consultations will be conducted with a focus on making an improvement to the housing guarantee system, the reinforcement of housing guarantee screening, and management after housing guarantees.

The meeting was attended by 30 government officials from both countries including, Kim Dae-shik, Korean ambassador to Kazakhstan and Dulat Zharlykapov, CEO of Housing Guarantee Fund in Kazakhstan.

“With this KSP project, we will establish an institutional system for the establishment of the housing guarantee system in Kazakhstan and the stabilization of the housing market,” said Jin Woong-seop, chief adviser for the KSP project in an opening speech.

Kazakhstan, on the other hand, introduced a pre-sales system to expand housing supply, and is actively benchmarking HUG’s housing guarantees to protect those signed who housing purchase contracts.

As a result, Kazakhstan laid the foundation for the operation of the pre-sales system and pre-sales guarantee system such as enacting a relevant act and establishing Housing Guarantee Fund or HGF for short in 2016.

Through this KSP project, Kazakhstan will receive a full range of know-how from the issuance of housing guarantees to implementation from HUG.

“We hope that Kazakhstan will set a good example in housing guarantees by receiving our know-how through this KSP project,” said Lee Chae-kwang, president of HUG.