Jugeumgong, Increase Maximum Limit of Jeonse Special Guarantee for Vulnerable Groups

[Asia Economy Reporter Eunju Lee] Korea Housing Finance Corporation announced on the 18th that starting from the 19th, it will raise the maximum limit of the special jeonse guarantee for vulnerable groups from 50 million KRW to 80 million KRW to support housing stability for vulnerable groups. The special jeonse guarantee product is a jeonse deposit guarantee system that offers preferential treatment to low-income and low-credit vulnerable groups such as credit recovery recipients and socially disadvantaged individuals, regardless of income or credit score.

The products with increased guarantee limits include those available to micro-business owners and users of policy-based financial services for low-income households, such as ▲ credit recovery support recipients ▲ socially disadvantaged individuals ▲ policy-based financial service users ▲ micro-business owner special guarantee products.

The jeonse deposit guarantee is a guarantee product that allows borrowers to obtain loans secured by the corporation’s guarantee certificate when borrowing the jeonse deposit. The loan limit is determined in proportion to the corporation’s jeonse guarantee limit, and customers pay a guarantee fee while using the guarantee.

The Korea Housing Finance Corporation explained that depending on whether bond preservation measures are taken, ▲ credit recovery support recipients, socially disadvantaged individuals, and policy-based financial service users with income below 15 million KRW can receive up to 60 million KRW ▲ micro-business owners and policy-based financial service users with income exceeding 15 million KRW can receive up to 80 million KRW in jeonse guarantees.

The corporation also plans to expand the guarantee support targets for the special jeonse guarantee. Diligent repayors who have paid more than 12 installments of repayment among those receiving rapid debt adjustment support from the Credit Recovery Committee will also be included in the ‘credit recovery support special jeonse guarantee’ target.

Additionally, the target for the ‘micro-business owner special jeonse guarantee’ will be relaxed from those exempt from VAT payment obligations to those with annual business income of 25 million KRW or less, expanding support for micro-business owners facing difficulties due to COVID-19 and other challenges.