President Lee Jae-myung is facing scrutiny after it was revealed that he utilized a method known as "seller financing"—where the seller provides a mortgage to the buyer—during the sale of his apartment in Bundang. Critics online have accused him of circumventing government loan regulations, and some homeowners have begun posting similar sales offers.
On July 20, a post appeared in a real estate community titled, "Selling a 24-pyeong apartment in Gangnam's Jagok I-Park for 2 billion won." The author, identified as A, stated, "The basic loan of 400 million won will be at market bank rates, and I can provide an additional loan of up to 1 billion won based on annual income," suggesting it was a good opportunity for high-income professionals and dual-income couples facing difficulties with bank loans.
This post gained traction, drawing attention to President Lee's own real estate transaction. According to the Supreme Court's registry, the apartment in Yangji Village, Su-nae-dong, Seongnam, co-owned by President Lee and First Lady Kim Hye-kyung, was sold for 2.9 billion won on July 14, with ownership transferred on July 16.
However, the couple established a mortgage of 1.77 billion won against the buyer, who is expected to pay the remaining balance by the end of October.
One internet user remarked, "The government's real estate policy aimed to control housing prices by making loans difficult, yet the president used an alternative method to facilitate the transaction. It raises questions about his sincerity when he claims to sell his property to support housing market stabilization while circumventing the rules he set for others."
Other users echoed similar sentiments, stating, "With mortgage loans restricted, homeowners are turning to private financing," and "If the president can do it, others will likely follow suit. The government said it would control housing prices by restricting loans, yet alternative transactions are emerging, and the president himself is engaging in such practices."
This has led to questions online about the legality of sellers lending money to buyers in real estate transactions.
Seller financing involves the seller providing funds directly to the buyer instead of a financial institution, with the buyer repaying the loan over time. While this method is sometimes used in environments with strict loan regulations, it typically requires a strong trust relationship between the buyer and seller, tax and legal reviews, mortgage establishment, and significant cash liquidity.
In the real estate industry, such transactions often involve several hundred million won, and high-value property deals may be subject to tax audits or source of funds investigations, often necessitating the involvement of lawyers or tax advisors. Economic experts view these transactions as effectively private financing.
In response to the growing controversy, the presidential office issued a statement regarding the mortgage establishment, explaining, "This was based on the buyer's circumstances. The sale was conducted at a price lower than the market value of 2.9 billion won, and while there is no obligation to sell as a homeowner, the president sold the property to demonstrate his commitment to real estate normalization policies."
However, the controversy appears to be gaining traction across the political spectrum, with progressive online communities also posting related articles and critical opinions, suggesting that the issue is unlikely to subside soon.
* This article has been translated by AI.
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