'Jeonse Deposit Return' Landlords and 'Homeless' Youth Guarantee Limit Raised

Jugeumgong to Expand Limits on Rental Deposit Return Guarantee and More Starting from the 26th

[Asia Economy Reporter Yu Je-hoon] The guarantee limits for landlords who need to return jeonse deposits and for homeless youth are being raised.

Korea Housing Finance Corporation (HF) announced on the 25th that from the 26th, the limits for the 'Lease Deposit Return Fund Guarantee' and the 'Special Jeonse Fund Guarantee for Homeless Youth' will be expanded respectively. This is part of the follow-up measures after the government's 3rd Real Estate Ministers' Meeting.

First, the total limit for the Lease Deposit Return Fund Guarantee, a guarantee product used when landlords take out loans to return the lease deposit to tenants due to reasons such as lease contract expiration or renewal with a reduced deposit, will be raised from 100 million KRW to 200 million KRW, and the guarantee limit per house will be increased from 50 million KRW to 100 million KRW.

The guarantee target is landlords who wish to borrow from financial institutions to return the lease deposit to tenants. At this time, the housing price must be 1.2 billion KRW or less. In addition, the loan (guarantee) limit is within 100 million KRW per house and is the lesser amount between 30% of the existing lease deposit and a separately calculated amount. The separately calculated amount means the amount obtained by multiplying the housing price by 60%, adding 50 million KRW, and then subtracting the senior lien amount.

The guarantee fee borne by individual customers is determined by the guarantee amount, guarantee period, and guarantee fee rate. The guarantee fee rate is 0.6%, and a 0.1 percentage point discount is applied for preferential households such as multi-child families, newlyweds, and low-income households. The Lease Deposit Return Fund Guarantee can be applied for at financial institution branches, and the application period is within three months before or after the lease contract expiration date or within three months before or after the contract termination date.

Furthermore, HF is also raising the limit for the Special Jeonse Fund Guarantee for Homeless Youth, which offers preferential recognized income and guarantee limits compared to the general jeonse fund guarantee for homeless individuals aged 34 or younger with a combined annual household income of 70 million KRW or less, from 100 million KRW to 200 million KRW. However, if the special jeonse fund guarantee amount exceeds 100 million KRW, the guarantee limit will be applied according to repayment ability.

Choi Jun-woo, President of HF, said, "We hope this system improvement will help landlords who are struggling to return lease deposits due to falling jeonse prices and slightly reduce the housing cost burden for young adults and first-time workers," adding, "We will continue to actively promote system improvements to alleviate the housing cost burden for the public."