HDC Hyundai Development Company, 263 Billion KRW Housing Support and Other Measures for Gwangju Collapse Accident

Support for Jeonse Deposit and Interim Payment Subrogation Until Reconstruction Completion

Hyundai Development Company Apartment Construction Site

HDC Hyundai Development Company (HDC Hyundai) announced on the 11th that it has prepared a comprehensive plan worth 263 billion KRW to support the housing needs of contract holders related to the collapse accident of the Gwangju Hwajeong I-Park apartment that occurred last January.

After deciding to demolish the entire apartment complex in May and rebuild it, HDC Hyundai presented measures to ensure that contract holders can live stably near Seo-gu, Gwangju, until they move into their new homes.

First, the support amount of 263 billion KRW consists of 100 billion KRW for housing support funds to secure jeonse (key money deposit) and other housing expenses, and 163 billion KRW for the advance payment of interim payments.

The 100 billion KRW housing support fund is an interest-free loan amount that contract holders can use for jeonse funds and other housing expenses during the remaining 61 months until moving in, and HDC Hyundai will bear all financial costs related to the support funds until the move-in date.

If a contract holder chooses not to take out the housing support loan, they will receive a discount on the sale price equivalent to the amount of the support funds plus an annual interest rate of 7% applied until the move-in date.

The advance payment of interim payments was prepared to help contract holders recover their total debt service ratio (DSR, the ratio of loan principal and interest repayment to annual income).

HDC Hyundai plans to use a total of 163 billion KRW to make advance payments on the interim payment loans executed up to the 4th installment by contract holders. Through this support measure, contract holders will be able to secure financial capacity, such as being able to take out additional loans by escaping the DSR regulations caused by the Hwajeong I-Park contract.

An HDC Hyundai official explained, "Looking at the representative unit size of Hwajeong I-Park, which is 35 pyeong (approximately 115.7 square meters), this comprehensive housing support plan can be seen as providing about 330 million KRW in financial support per household."

Contract holders will resolve the DSR restrictions that had increased due to the 220 million KRW loan executed up to the 4th interim payment, and are expected to live stably in the Gwangju area in the form of jeonse or similar during the rebuilding period by utilizing the 110 million KRW interest-free housing support fund.

In addition, after announcing this housing support plan, HDC Hyundai plans to visit contract holders directly from the 12th to provide guidance and minimize their questions and inconveniences.

Furthermore, through collaboration with related organizations, a related system will be established to accept relevant documents around September and to execute the disbursement of housing support funds and advance payment of interim loans starting from October.

Also, for those who wish to cancel their contracts, procedures will be prepared to allow cancellations in October (according to the apartment supply contract, contract cancellation is possible only after three months from the scheduled move-in date, which is November 2022, so cancellations will be possible from February 2023 onward). Contract holders who wish to cancel will be paid a penalty fee equivalent to 10% of the sale price and interest on the amounts already paid.

On May 4th, at the HDC Hyundai Development Company Yongsan headquarters in Seoul, Chairman Chung Mong-gyu and the Hyundai Development Company management team are greeting attendees at a press conference announcing additional measures related to the Gwangju Hwajeong-dong I-Park accident response. Photo by Moon Ho-nam munonam@

Gwangju Hwajeong I-Park consists of a total of 847 units, including 705 apartment units in 8 buildings across phases 1 and 2, and 142 officetel units. After being sold in June 2019, the original move-in date was scheduled for November 2022, but due to the demolition of all buildings and the rebuilding period, the target move-in date is now December 2027.

HDC Hyundai formed a dedicated team including external experts for the rebuilding of Hwajeong I-Park and began dismantling the exterior walls of Building 201, which raised safety concerns, on July 6. Currently, they are establishing optimized construction methods and proceeding with the approval process for the full demolition and rebuilding.