The Housing and Urban Guarantee Corporation (HUG) is set to introduce new services that provide price information for villas and multi-family homes, along with a certification system for quality jeonse listings. This initiative aims to reduce information asymmetry in the non-apartment market, where rental fraud has been prevalent. HUG plans to expand its role beyond a guarantee institution to a public platform that encompasses housing supply, financial services, and data offerings.
During a press briefing marking his 100 days in office on May 7, Choi In-ho, HUG's president, stated, "We will utilize our 700 billion data points to enhance housing stability for the public." He emphasized the need to provide reliable price information for villas and multi-family homes, which are often difficult to verify compared to apartments, to protect low-income renters.
HUG's 'Safe Villa Price' initiative will combine appraisal data and actual transaction information to calculate appropriate prices by region and property age. This information will be presented through a map-based visualization service. The non-apartment market has faced challenges due to limited transaction examples and significant price variations, making it hard for tenants to assess fair rental prices.
Additionally, HUG plans to implement a certification service for quality jeonse listings. This will involve evaluating properties based on deposit amounts, priority claims, and regional average debt ratios to assign a certification mark to lower-risk listings. Collaborations with proptech platforms like Naver Real Estate and Zigbang will allow tenants to assess risks before signing contracts.
The Safe Jeonse app will also be enhanced. HUG intends to strengthen its AI-based risk assessment service by integrating data from six agencies, including the Ministry of Land, Infrastructure and Transport and the National Tax Service. Currently, the app offers risk assessments, landlord information checks, and guarantee applications, with over 1 million downloads and 2.8 million uses.
Changes to the jeonse guarantee review process are also anticipated. HUG is considering a pre-review system that would allow for guarantee eligibility checks after the deposit is paid but before the final payment. Choi noted, "Implementing pre-reviews will significantly increase accident prevention rates." However, the direct incorporation of landlord credit ratings into the guarantee review process is not currently under consideration, as HUG focuses on making it easier for tenants to obtain guarantees.
HUG also announced plans to support housing supply. This year, it aims to increase the supply of its Dundeun Jeonse housing from 1,800 units last year to 3,000. The scope of purchases will expand from non-apartment properties to include apartments with over 150 units. Choi mentioned that discussions are ongoing to further increase Dundeun Jeonse acquisitions in response to rising rental pressures in Seoul.
The corporation is also enhancing support for youth housing and construction rental housing. HUG has improved the rental guarantee system for youth housing in collaboration with Seoul City, aiming to expedite occupancy for about 2,000 units across 10 projects that have not yet secured tenants. It anticipates facilitating the supply of approximately 18,000 units in Seoul by 2028.
For construction rental housing, HUG has revised guarantee extension criteria and appraisal methods. Previously, exceeding debt ratios required additional collateral for guarantee extensions, but this has been improved to allow extensions without extra financial burdens. HUG expects this will enhance conditions for around 1,000 projects, totaling 260,000 units of construction rental housing.
HUG also unveiled measures to stabilize the project financing (PF) market. It plans to raise the guarantee limit for PF special guarantees from 50% to 70% and eliminate construction ranking restrictions. HUG aims to provide 2 trillion won in special guarantees for small construction firms by 2027, having already achieved 90% of this goal as of late April. Choi affirmed, "We will strive to expand PF special guarantees beyond our targets."
Addressing unsold properties in local areas is another priority. HUG plans to expand its pre-completion unsold property purchase program and enhance mortgage guarantee support for unsold properties post-completion. Choi reported that there are currently about 30,000 unsold units in local areas, with 10,000 under review, and expressed commitment to achieving this year's goals based on previous successes in supporting 3,000 units with 850 billion won in guarantees.
Additionally, HUG plans to launch four new products this year, including guarantees for relocation costs in housing regeneration, public maintenance project loans, rental guarantees for senior welfare housing, and securitization of trust fee claims. Choi emphasized the importance of establishing a comprehensive and robust guarantee system to promote housing supply.
* This article has been translated by AI.
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