Korea Housing Finance Corporation (HF) announced on the 3rd that it will launch the 'Construction Cost Plus PF Guarantee' product to ensure smooth funding supply for normal project financing (PF) sites.
This guarantee product is planned to be operated temporarily until June 30 of next year. It includes expanding loan limits and funding support timing, as well as providing support for construction costs. This is a follow-up measure to the government's policy direction announced in May for the orderly soft landing of real estate PF.
The support targets are sites currently using construction PF guarantees but require additional construction costs or new PF guarantee target sites. The guarantee details include ▲ increasing the loan limit from the existing 70% of the total project cost to up to 90%, ▲ relaxing the funding support timing from before the tenant recruitment announcement to until project completion, and ▲ expanding support from mainly land costs and other project expenses to also include construction costs until project completion.
Additionally, to reduce the contractor's burden regarding contingent liabilities, the previous requirement for debt assumption in case of non-fulfillment of completion responsibility has been eased to compensation for damages. However, this is limited to cases meeting certain conditions such as construction ranking and credit rating.
Choi Jun-woo, President of HF, stated, "As support for PF sites facing difficulties in financing due to rising construction costs, we will fulfill our role as a public guarantee institution to help stabilize the construction market."
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