Government Launches "Regional Unsold Housing Guaranteed Repurchase" Program... Support for 10,000 Units by 2028 [Real Estate AtoZ]

HUG to Provide Up to 50% of Sale Price in Funding
Buyback Option Available After Completion
Lifeline for Construction Firms Facing High-Interest PF Loans and Unsold Units
Tax Reductions and Low-Interest Support...
"Preventing Moral Hazard and

The Ministry of Land, Infrastructure and Transport is taking active measures to reduce the unsold housing risk faced by regional construction companies. On September 4, the ministry announced that starting from September 5, it will launch the "Regional Unsold Housing Guaranteed Repurchase Program," aiming to provide liquidity support for a total of 10,000 housing units by 2028.

An apartment construction site in Buk-gu, Daegu, where construction has been halted for 10 months due to worker wage arrears. Photo by Kang Jinhyung

This program targets regional construction sites that have achieved a construction progress rate of at least 50% but are struggling with unsold units. The Korea Housing and Urban Guarantee Corporation (HUG) will provide funding for up to 50% of the sales price of unsold homes before completion. Construction companies will have the option to repurchase the unsold units from HUG within one year after completion. In this process, each construction company must sign an agreement to "actively cooperate to increase the sales rate through measures such as discounted sales."

The scale of the program will be expanded in phases: starting with 3,000 units this year, another 3,000 units next year, 2,000 units in 2027, and 2,000 units in 2028. To support this, the government will provide HUG with 250 billion won in capital and loans through this year's supplementary budget, aiming to reduce the financing costs included in the repurchase price. The ministry plans to set the repurchase price low enough to achieve an effective interest rate of around 3-4%.

Tax benefits are also being pursued. When HUG acquires unsold homes, acquisition tax, property tax, and comprehensive real estate holding tax will be reduced, and when construction companies repurchase the homes, the acquisition tax will be exempted to ease the repurchase burden. The public notice, detailed support requirements, evaluation procedures, and FAQs will be available on the HUG website starting September 5.

Kim Gyucheol, Director General for Housing and Land at the Ministry of Land, Infrastructure and Transport, stated, "We will provide low-interest funds backed by public institution guarantees to construction companies suffering from funding difficulties due to high-interest project financing loans and unsold units, supporting stable project execution and an increase in housing supply." He added, "We will also work to prevent moral hazard among construction companies and encourage them to make their own efforts in parallel."