Loan Limit Raised to 7.5 Billion KRW per Area
Support for Redevelopment Promotion Committees and Associations
The Seoul Metropolitan Government will provide a total of 24 billion KRW in loans this year to redevelopment project promotion committees and associations. To expedite project progress, the support procedure will be shortened by one month compared to last year.
According to the city on the 27th, the support targets are housing maintenance-type and urban maintenance-type redevelopment and reconstruction associations and promotion committees. Applications can be made once requirements such as designation of maintenance areas and approval of fund borrowing at general meetings are met. The loan limit is up to 7.5 billion KRW per area (6 billion KRW for associations, 1.5 billion KRW for promotion committees), with an interest rate of 4.0% per annum for unsecured loans and 2.5% per annum for secured loans.
The maintenance project loans have a 5-year maturity with lump-sum principal and interest repayment conditions; however, loans received by promotion committees can be extended annually until the selection of the contractor, and loans received by associations can be extended annually until the application for completion approval.
Previously, since 2008, the city has implemented a loan support system using public funds to revitalize maintenance projects and enhance transparency. A total of 320 billion KRW had been supported up to last year. In the previous year, 62 areas applied for a total of 109.1 billion KRW, and after review, 22.9 billion KRW was supported across 54 areas. Promotion committees and associations use the loans received from the city for various project expenses and operating costs such as service fees and general meeting fees necessary for project promotion.
Furthermore, this year, to support the swift progress of maintenance projects by promotion committees and associations facing difficulties in financing due to the construction market downturn, the loan support procedure will be shortened by one month compared to last year. This is expected to contribute to revitalizing maintenance projects and stabilizing public housing through expanded housing supply.
Associations or promotion committees wishing to apply for loan support can submit their application forms and required documents to the relevant district office’s maintenance project department from the 18th to the 26th of this month. The city plans to decide on the loan support targets and amounts in April this year and provide loans through the Housing and Urban Guarantee Corporation (HUG), the entrusted loan management institution.
Choi Jin-seok, Director of the Seoul Housing Office, stated, "We expect that associations or promotion committees struggling with initial funding difficulties during the construction market downturn will overcome their challenges through loan support and smoothly proceed with maintenance projects. We also plan to further strengthen public support to revitalize maintenance projects going forward."
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