HF and the Korea Inclusive Finance Agency sign a business agreement to support financially marginalized people with the Credit Counseling and Recovery Service at the Press Center in Jung-gu, Seoul on September 9. Choi Joon-woo (right), president of HF poses for a photo shoot with Lee Kye-moon, president of the Korea Inclusive Finance Agency and chairman of the Credit Counseling and Recovery Service. (Photos: HF)

Choi Joon-woo, president of Korea Housing Finance Corporation (HF), said he will take measures to ease criteria on guarantees for lease loans that allow tenants to receive loans at low interest rates as soon as possible.

Earlier in May, HF and the Financial Services Commission announced that they would raise the lease loan deposit standard from the current 500 million won to 300 million won (300 million to 500 million won in non-Seoul metropolitan areas), but it has not yet been implemented.

“We originally planned to implement it in the third quarter, but it is not yet implemented due to a delay in the development of computer systems and consultations with financial institutions,” President Choi said when asked by Rep. Park Yong-jin during a parliamentary audit at the National Assembly’s Political Affairs Committee on Oct. 18.
“We will do our best to implement it as soon as possible,” Choi added.

HF is one of the three major lease loan guarantee institutions, along with the Korea Housing & Urban Guarantee Corporation or HUG (up to 400 million won in lease loans) and SGI Seoul Guarantee Insurance (up to 500 million won).

Currently, if a lease deposit is less than 500 million won in the Seoul metropolitan area and 300 million won in the non-Seoul metropolitan area, up to 222 million won in lease loans can be given within 80 percent of the deposit. If the deposit standard rises at a time when lease prices have soared, more tenants can use lease loans.

However, even if the deposit standard is raised, the loan limit will stay at 222 million won. Some experts in the financial sector point out that the government has recently prioritized suppressing household loans, so HF may be passive in easing the standard on lease loans.

Issuance of HF’s First-Ever MBSs

HF announced on Sept. 17 that it will issue straight mortgage-backed securities for the first time since its founding.
Some MBSs, which was previously issued by HF Corporation, included call options through which HF redeems principals to investors even before the MBSs expire.

However, the MBSs to be issued this time are subject to the repayment of principals as they are bereft of call options.

The straight MBSs will be worth about 540 billion won as one-year, two-year, three-year and five-year papers. Despite a rise in treasury bond rates, their final issuance rate will stand at 1.875 percent, down 0.161 percentage points from 2.036 percent of the issuance rate of MBSs issued on Sept. 3.

“We could cut the lending rate because we reduced their maturity period and uncertainties in call options in line with investors’ demand,” an HF official said. “HF will continue to expand the number of investors by diversifying its issuance structures.”

HF holds a ceremony to make a donation at the Busan Dolbom Social Service Center in Busan on October 6 to support new mothers and create jobs in Busan. Choi Joon-woo (left), president of HF has a photo with Ahn Hye-kyung, head of the Busan Dolbom Social Service Center.

Making Mothers in Busan Happy

HF said on Oct. 6 that it has delivered donations to the Busan Dolbom Social Service Center, a social economic company, to help new mothers in Busan with cooking and childcare.

HF will also deliver baby belts, a necessity for newborns, to 173 mothers in Busan, recommended by the Busan Dolbom Social Service Center.

In addition, the center plans to hire 20 new postpartum care workers with donations from HF so that they will help mothers of marginalized groups with postpartum care and raise newborns.

“We want to support social economy companies that provide essential services to our society, relieve families with newborns of economic burdens and create decent jobs for those in their 40s and older,” HF President Choi said.

“HF will continue to make efforts to foster social economic companies and promote community welfare.”