Korea Housing Finance Corporation to Provide Funding for Stable Construction Sites

Launch of 'Construction Cost Plus PF Guarantee' Product
Follow-up to Government's 'Real Estate PF Soft Landing Policy'

Korea Housing Finance Corporation (HF) will launch the 'Construction Cost Plus PF Guarantee' product, which expands loan limits and funding periods and supports construction costs to ensure smooth funding for normal Project Financing (PF) sites.

This product, scheduled to be operated temporarily until June 30, 2025, is a follow-up measure to the government's 'Future Policy Direction for the Orderly Soft Landing of Real Estate PF' announced in May. Its purpose is to ensure smooth funding for construction sites with sufficient business feasibility but experiencing temporary liquidity shortages.

The target includes sites currently using the corporation's PF guarantee but requiring additional construction costs, as well as new sites eligible for PF guarantees.

This product increases the loan limit from the existing 70% of the total project cost to up to 90%, and extends the funding period from before the pre-sale announcement to the completion of construction. In addition, the guarantee support, which was previously focused on land and other project costs, is expanded to include construction costs until completion.

In particular, to reduce the burden of contingent liabilities on construction companies, the requirement to assume debt in the event of non-fulfillment of completion responsibility has been eased to compensation for damages. However, this is limited to cases that meet certain conditions such as construction ranking and credit rating.

Choi Junwoo, president of HF, stated, "As a public guarantee institution, we will do our best to help stabilize the construction market by supporting PF sites experiencing funding difficulties due to rising construction costs."