"To Increase Newborn Special Loans"…Income Requirement Relaxed to '250 Million Won'

Ministry of Land, Infrastructure and Transport Announces 'Measures to Reverse Low Birthrate'

Special Newborn Loans
Combined Couple Income Up to 200 Million KRW This Year
Relaxed to 250 Million KRW for Births Next Year

Priority Newborn Supply
Newly Established and Expanded to Supply Over 120,000 Households Annually

The government will raise the combined income requirement for couples eligible for the newborn special loan to 250 million KRW per year for households giving birth over the next three years, starting January 1 next year.

By effectively removing the income limit, high-income dual-income couples will also be able to access the low-interest newborn special loan. Additionally, the priority supply for newborns will be expanded, increasing housing supply for childbirth households from 70,000 units per year to over 120,000 units.

On the 19th, the Low Fertility and Aging Society Committee and related ministries jointly announced the "Measures to Reverse the Low Birthrate Trend," which includes easing the income requirements for policy loans for marriage and childbirth households.

Newborn Special Loan: Income Criteria Raised Twice

The newborn special loan is a system that provides low-interest loans ranging from 1% to 3%, up to 500 million KRW, for housing purchase funds and jeonse (key money deposit) funds to households without a home or those with one home (for refinancing), who have given birth or adopted within two years of the loan application date. Eligible housing for purchase loans must be priced at 900 million KRW or less and have a floor area of 85㎡ or less.

The Ministry of Land, Infrastructure and Transport initially set the income criterion for the newborn special loan, launched on January 29 this year, at 130 million KRW. Then, in early April, it announced plans to raise the combined income limit for couples to 200 million KRW. The income criterion increase will take place in the third quarter of this year.

Before the related procedures have even been completed, the ministry has now proposed raising the combined income limit to 250 million KRW for households giving birth between 2025 and 2027. However, the housing price, area, and asset criteria (469 million KRW) will remain unchanged.

However, the income range of 200 million to 250 million KRW corresponds to roughly the top 2%. This has raised concerns about whether it is appropriate to include these households in the government's low-interest loan program. In response, Lee Ki-bong, Director of Housing Welfare Policy at the Ministry of Land, Infrastructure and Transport, said, "We want to use all available means to reverse the low birthrate," adding, "We will implement this experimentally for three years and then decide whether to extend it."

So far, about 6 trillion KRW (combined purchase and jeonse funds) has been disbursed through the newborn special loan. The ministry expects about 10 trillion KRW to be used up by the end of the year.

Households that have additional births during the loan period will receive further preferential interest rates. The original 0.2 percentage point reduction will be increased to 0.4 percentage points.

Expansion of Housing Supply for Newlyweds and Childbirth Households

By expanding priority supply for newborns, releasing Greenbelt areas, securing new housing sites, and increasing purchased rental housing, housing supply for newlywed, childbirth, and multi-child households will be expanded. First, the priority supply volume for newborns among private and public sale housing will be newly established and expanded to supply over 120,000 units annually.

In the private sale sector, the priority supply ratio for newborns within the special supply for newlyweds will be increased to 35%. Currently, it is 20%. In the public sale sector, a new plan will be established to allocate 50% of the general supply volume as priority supply for newborns.

In the public rental sector, 5% of the total general supply volume in construction rentals will be designated as priority supply for newborns. For purchased, jeonse, and re-supply rentals, the supply for childbirth households will be increased from 10% to 30% of the total.

In the public-supported private rental sector, a special supply for newborns (5%) and priority supply within general sales (30%) will be newly established.

Greenbelt Release to Discover Additional New Housing Sites This Year

This year, mainly in the metropolitan area, Greenbelt areas will be released to discover new housing sites capable of building 20,000 units, supplying up to 14,000 units (70% of total) of public housing for newlywed, childbirth, and multi-child households.

Purchased rental housing supply targets will increase by 30,000 units from the existing 70,000 units planned for this year through next year. Of the additional supply, 22,000 units will be allocated to newlywed and childbirth households.

Additionally, the proportion of special supply for newlyweds in private sales will be raised from the current 18% to 23%. This will result in an increase of about 10,000 units annually, from approximately 36,000 to 46,000 units.

The Ministry of Land, Infrastructure and Transport stated that it will swiftly complete the release of development-restricted areas and agricultural promotion zones for the eight already announced public housing districts (165,000 units) and promptly implement development plans.