Seoul City will expand the interest subsidy support, which was previously only available for large-scale developments, to small-scale maintenance projects in order to revitalize 'Human Town 2.0,' a program that supports individual building construction in aging low-rise residential areas where redevelopment is difficult.
Photo of the agreement ceremony. From the third person on the left, Hwang Jaepil, Head of Institutional Sales Division 3 at Shinhan Bank, Han Byungyong, Director of Housing Office, Seoul Metropolitan Government. (Provided by Seoul Metropolitan Government)
On the 27th, Seoul City announced that it will implement the 'Human Town 2.0 Interest Subsidy Support' project, which provides partial interest support when small-scale maintenance project implementers, such as multi-family and multiplex housing, take out private financing loans for project costs.
The city plans to support part of the difference between the loan interest rate and a low interest rate for bank loans on buildings within the Human Town management area. It will support up to a maximum annual interest rate of 3.0% on the loaned amount for up to three years after the start of construction. This is the first time that interest subsidy support has been provided for small-scale low-rise residential development projects. To this end, Seoul City signed a Memorandum of Understanding (MOU) with Shinhan Bank the day before regarding the 'Human Town 2.0 Construction Project Fund Loan Interest Subsidy' project.
The MOU includes details on ▲principles for managing loan funds for interest subsidy recipients ▲calculation and payment of interest subsidy funds ▲start and duration of interest subsidy ▲cancellation of interest subsidy decisions, among others.
Seoul City will take on administrative support roles related to the project, such as recommending loan recipients and disbursing interest subsidy funds. Shinhan Bank will cooperate in credit screening and loan execution for the recommended loan recipients, as well as quarterly claims and payments of interest subsidy funds.
Eligibility is limited to project implementers who have obtained building permits and received loans for project funds to construct non-apartment buildings such as multi-family, multiplex, and row houses within the Human Town 2.0 project area. The city plans to announce the project and recruit applicants in the second half of this year, and select recipients through preliminary review meetings and advisory committees.
Han Byung-yong, Director of the Housing Office at Seoul City, said, "We expect that the interest subsidy support for low-rise residential areas, the first of its kind nationwide, will revitalize the sluggish small housing construction market," adding, "We will spare no administrative support."
Meanwhile, Human Town 2.0 is a project that supports individual building construction rather than redevelopment or reconstruction projects involving complete demolition.
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