President Lee Chae-kwang of Korea Housing & Urban Guarantee Corporation (HUG) makes a thank-you gesture with HUG officials in a campaign to extend respect and thanks to medical personnel who have contributed to preventing COVID-19. (Photo: HUG)

Korea Housing & Urban Guarantee Corporation (HUG) has decided to halve the guarantee fee rate for housing subscriptions between July and Dec. 31. HUG hopes it will cope with the sagging economy, which was hit by the spread of COVID-19. The step came as part of HUG’s steps to reinforce public services.

Housing subscription guarantee is HUG’s representative guarantee product. It is designed to protect housing buyers through hosing subscription, or refunding prepaid contract money and intermediate payments in the event that project entities cannot make good on subscription contracts due to bankruptcy.

The issuance of the housing subscription guarantee is mandatory for pre-subscription prior to construction.

Housing subscription guarantee fee rate stands at 0.138 percent for allotted housing site costs, and it ranges from 0.158 percent to 0.469 percent based on credit grades and the feasibility of project entities.

The latest step has slashed the rate by half.

HUG President Lee Jae-kwang said, “We support smooth implementation of projects by relieving the burden of project entities by lowering the housing subscription guarantee fee rate.”

HUG Lowers Guarantee Fee Rates for 13 Guarantee Products

HUG lowered guarantee fee rates for 13 guarantee products, including jeonse deposit loan return guarantee, starting July 1. The step came as part of HUG’s attempt to reinforce public services.

HUG decided to lower by 70 percent to 80 percent guarantee fees of four guarantee products, including jeonse deposit loan return guarantee, by the end of this year as part of efforts to support the stability of low-income families’ livelihood.

HUG also lowers by 30 percent guarantee fees of nine guarantee products, including post-subscription guarantee by the end of the year.

In particular, the fee rate of the jeonse deposit loan return guarantee is lowered by 80 percent in the case of less than 200 million won in jeonse deposit money and 70 percent in jeonse deposit money.

Tenants belonging to the underprivileged such as low-income families and households with multiple children will be given an additional guarantee fee cut to dramatically reduced their related financial burden.

HUG President Lee said, “HUG will continue to endeavor to expand its public services as a public entity.” HUG will do its best to ease low-income people’s financial burden and strengthen the protection of tenants by immediately executing institutional overhaul steps, he added.