[Asia Economy Reporter Kwangho Lee] Korea Housing Finance Corporation announced on the 18th that it will sign a "Busan City Youth and Newlywed Couple Housing Lease Deposit Support Project Business Agreement" with Busan City and BNK Busan Bank to expand support for the agreement-based jeonse loan guarantee used by newlywed couples and youth without housing in Busan.
Under this agreement, the loan limit for newlywed couples using the agreement-based jeonse loan guarantee will increase by 50 million KRW from the existing 150 million KRW to 200 million KRW.
Additionally, Busan Bank will lower the loan interest rate to around 1.5%, and Busan City will support newlywed couples with an interest subsidy of 1.5 percentage points.
As a result, newlywed couples who meet the eligibility criteria will be able to use jeonse loans virtually interest-free, and the interest burden is expected to decrease by 0.3 to 0.8 percentage points compared to before the revision.
Support for the agreement-based jeonse loan guarantee for Busan youth will also be expanded. The loan limit will increase by 70 million KRW from the existing 30 million KRW to 100 million KRW, and the guarantee limit, which was up to 80% of the lease deposit, will be expanded to 90%.
Busan Bank will lower the loan interest rate to around 1.5%, and Busan City will provide an interest subsidy of 1.5 percentage points to youth. Accordingly, the youth will also be able to use jeonse loans without the burden of loan interest, similar to the newlywed couple agreement-based jeonse loan guarantee.
Through this Busan City agreement-based jeonse loan guarantee support expansion agreement, Korea Housing Finance Corporation will provide 100% guarantee on jeonse loan amounts to youth and newlywed couples, as well as increase guarantee limits and offer financial support at the lowest guarantee fee rate level (0.02%).
However, since this is a product receiving financial support from Busan City, applicants must maintain eligibility not only at the time of application but also during the usage period.
The revised Busan City newlywed couple agreement-based jeonse loan guarantee can be applied for directly at BNK Busan Bank branches starting from the 16th of next month, and after the review period, loans can be received from October.
Also, applications for the Busan City youth agreement-based jeonse loan guarantee are scheduled to be accepted through the Busan Youth Platform in September, and eligible applicants will be able to receive loans from October after screening by Busan City and Busan Bank.
Choi Jun-woo, President of Korea Housing Finance Corporation, said, "Through this agreement, we hope that youth and newlywed couples will have dreams and hopes in warm homes," and added, "We will continue to actively cooperate with local governments to sufficiently support inclusive housing finance for youth and newlywed couples."
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