"Receiving Housing Pension, Living in Rented House with Monthly Rent" Using This Money to Move to Senior Housing [Senior House]

[8] Only One House Owned, Can Monthly Rent Be Afforded?

For Post-Elderly Aged 75 and Over
If the Apartment Is Worth 600 Million KRW, Receiving 2.22 Million KRW Monthly Covers Living Expenses

Even When Moving to Senior Welfare Housing
Housing Pension Can Be Maintained

How can elderly people who have no proper income or pocket money from their children afford monthly rent for senior welfare housing that amounts to millions of won? Operators of senior welfare housing responded, "They can receive housing pensions."

The housing pension is a product where elderly people pledge their homes as collateral to the Korea Housing Finance Corporation (HF) and receive monthly living expenses until their death. If one spouse is aged 55 or older and the publicly announced price of the house is 1.2 billion won (market price about 1.7 billion won) or less, they qualify to enroll. Even if apartment prices are the same, the monthly amount received is smaller for younger applicants and larger for older applicants, considering life expectancy.

The housing pension can only be received if you continue to live in the house you lived in. In fact, this clause became an obstacle preventing elderly people from moving into senior welfare housing. If a person receiving a housing pension moves to senior welfare housing and leaves their previous home, they had to return the housing pension they had received so far.

To solve this problem, the Financial Services Commission has taken measures since the 20th to allow elderly people moving into senior welfare housing to maintain their housing pension enrollment. Even elderly people without other income can now find a way to cover monthly rent if they own just one house.

An official from the Korea Housing Finance Corporation explained, "When an elderly person receiving a housing pension moves into senior welfare housing, they can find a tenant and rent out their previous home, earning income from both sides." Elderly people are divided into two groups when moving out of their homes: the ‘empty house faction’ who dislike others handling their property and leave it as is, and the ‘rental faction’ who decide to earn rent if possible.

The rental faction can choose different deposit amounts depending on the housing pension method they applied for. The official explained, "If the housing pension was applied for under the ‘mortgage method,’ it can be rented out as monthly rent without a deposit," and "If enrolled under the ‘trust method,’ monthly rent with a deposit is possible, but the consent of the Korea Housing Finance Corporation, which has taken ownership, is required."

Kim Jin-woong, head of the 100-Year Life Research Institute at NH Investment & Securities, advised, "Elderly people in Korea have mostly built their assets centered on real estate," adding, "Even elderly people with net assets of 500 to 600 million won often have almost no other assets besides their homes, so receiving a housing pension is the most realistic way to prepare for the monthly rent of senior welfare housing." He also explained that elderly people who previously purchased and moved into senior welfare housing can use that as collateral to receive a housing pension.

[8] Owning Only One House, Can They Afford Monthly Rent?