53 Billion Won in Unexecuted Loans to Be Reallocated to Revitalize Projects
"Public Support to Be Strengthened for Redevelopment Project Vitalization"
The Seoul Metropolitan Government will provide a total of 5.3 billion won in redevelopment project loans to promotion committees and associations facing difficulties in securing funds due to the downturn in the construction market.
According to the city on September 3, this support will be provided through a public application process, reallocating 5.3 billion won that was not executed after the 24 billion won loan decision in the first half of the year due to withdrawals or disqualifications. The city aims to offer practical assistance to districts that were unable to apply in the first half or require additional funds.
Previously, in the first half of the year, 68 billion won was requested from 43 districts, and after review, a total of 24 billion won (approximately 100 million to 800 million won per district) was approved for 42 districts.
Redevelopment projects are an important policy tool for improving aging housing and residential environments. Since 2008, the city has implemented a loan support system using public funds to vitalize these projects. As of July this year, a total of 330 billion won has been provided.
Promotion committees and associations can use the loans received from the city for various project and operating expenses, such as service fees and general meeting expenses required to advance redevelopment projects. This allows for stable funding at the early stages of redevelopment and reconstruction projects.
The loan support targets are housing-type and urban-type redevelopment and reconstruction associations and promotion committees. Applications can be submitted if requirements such as a general meeting resolution for borrowing are met. The maximum loan limit per district is 7.5 billion won, with up to 6 billion won for associations and 1.5 billion won for promotion committees. The annual interest rate is 4.0% for unsecured loans and 2.5% for secured loans.
The loan term is a five-year lump-sum repayment of principal and interest, but it can be extended annually until a contractor is selected for promotion committees or until a completion approval application is submitted for associations. Associations or promotion committees wishing to receive loan support must submit an application form and required documents to the relevant district redevelopment project department between September 4 and 26.
The city will review the status and execution plans of each district next month to determine the loan support recipients and amounts. Afterward, the loans will be provided through the Housing and Urban Guarantee Corporation (HUG), which is responsible for the custody and management of the funds, starting next month.
Choi Jinseok, Director of Housing at the Seoul Metropolitan Government, stated, "We expect that loan support will be a significant boost for redevelopment districts facing delays or the risk of suspension due to funding shortages," adding, "We will continue to strengthen public support to vitalize redevelopment projects."
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