LH Employees' Home Purchase Loan Amount Soars 29-Fold... Controversy Over "Preferential Treatment with Taxpayer Money"

Democratic Party Rep. Heo Jong-sik: "Special Privileges with Tax Money Not Even Caught by DSR"

Korea Land and Housing Corporation (LH) has seen a sharp increase in housing purchase loans and living stabilization fund loans provided as employee welfare last year and this year.

According to data submitted by LH to Heo Jong-sik, a member of the National Assembly's Land, Infrastructure and Transport Committee from the Democratic Party of Korea, over the past five years, LH has provided a total of 29.2 billion KRW in housing purchase loans and 155 billion KRW in living stabilization fund loans to employees, totaling 184.2 billion KRW.

The amount of housing purchase loans, which was only 480 million KRW (10 cases) in 2017, remained low at 550 million KRW (11 cases) in 2018 and 950 million KRW (19 cases) in 2019. However, as housing prices rose, it increased to 1.61 billion KRW (33 cases) in 2020 and then surged to 13.83 billion KRW across 171 cases in 2021. The number of cases increased by 418% and the amount by 759% compared to the previous year.

Source: Office of Assemblyman Heo Jong-sik

In contrast, housing rental deposit loans, which are used for increases in monthly rent deposits, decreased from 315 cases totaling 18.85 billion KRW in 2017 to 172 cases totaling 13.58 billion KRW in 2021.

Living stabilization fund loans were 382 cases amounting to 9.61 billion KRW in 2017 but rose to 1,829 cases totaling 60.42 billion KRW in 2021.

Compared to 2020 (757 cases, 19.88 billion KRW), the number of cases increased by 142% and the amount by 204%.

LH provides housing purchase loans and living stabilization fund loans to employees up to 70 million KRW (once during employment) and 30 million KRW respectively, with a maximum combined support of 100 million KRW. The Debt Service Ratio (DSR) is not applied.

The loan interest rate was 2.4% per annum last year; the housing mortgage loan rate is similar to commercial bank rates, while the living stabilization fund loan rate is significantly lower than bank unsecured loan rates.

The period during which housing purchase loans and living stabilization fund loans surged coincides with the real estate 'Yeongkkeul' (all-in investment) trend.

Assemblyman Heo Jong-sik stated, "Analysis shows a very high correlation coefficient between living stabilization fund and housing purchase loans: 0.89 for the number of loans and 0.93 for the amount." He added, "It cannot be ruled out that over 180 billion KRW in funds flowed into LH employees' real estate 'Yeongkkeul' over the past five years."

Heo also said, "While citizens face difficulties in securing homes due to various loan regulations, LH employees have received special privileges with taxpayers' money that is not counted under DSR. Given the public outrage over speculation involving LH, the corporation must operate internal systems in line with public expectations."