First Supply of Multi-Child Jeonse Rental Housing

[Asia Economy Reporter Yoo In-ho] Multi-child jeonse rental housing is being supplied for the first time.

The Ministry of Land, Infrastructure and Transport announced on the 13th that from the 26th, it will recruit tenants for 7,540 jeonse rental housing units for multi-child households in 159 cities, counties, and districts nationwide.

Tenants search for jeonse housing within the support limit, and public housing providers such as Korea Land and Housing Corporation (LH) sign jeonse contracts with the housing owners and then re-rent the housing to tenants at prices lower than market rates. By type, there are 1,500 units for multi-child households, 3,000 units for the elderly, and 3,040 general units.

The multi-child type was newly established so that multi-child households can live in larger homes, targeting households with two or more minor children without home ownership. Recipients of housing benefits and lower-income groups have priority to apply.

Jeonse deposits are supported up to 120 million KRW for two-child households based on the metropolitan area standard, and for three or more children, an additional 20 million KRW is provided per child.

To prioritize households with many children and poor housing conditions, up to 9 points are awarded based on the number of children and current housing conditions, and the final tenant ranking is determined in order of highest points within the ranking.

For the elderly type, the first-priority qualification is relaxed starting this year. Elderly people who receive only housing benefits without livelihood or medical benefits, or those in the lower-income bracket, who previously could only apply as second priority, can now apply as first priority from this recruitment.

The elderly type is supported up to 90 million KRW based on the metropolitan area standard, similar to the general type. Jeonse rental tenants bear a deposit burden of 2-5% of the jeonse support amount as a tenant deposit and pay monthly rent with an annual interest rate of 1-2% on the supported amount (95-98% of the jeonse deposit).

The Ministry of Land, Infrastructure and Transport reduces tenants’ monthly rent burden by lowering the interest rate by up to 0.5 percentage points depending on the number of minor children. One child receives a 0.2%p reduction, two children 0.3%p, and three or more children 0.5%p. A preferential interest rate of 0.2%p is applied to recipients of livelihood and medical benefits.