Lee Ok-yeon, the chairman of the Financial Services Commission, urged the financial sector to ensure seamless support for loans related to moving expenses, interim payments, and final payments for genuine homebuyers.
On August 14, during a meeting in Seoul with financial institutions and related agencies to review household debt, Lee emphasized the importance of actively cooperating with the comprehensive real estate finance measures announced by the government the previous day.
Lee stated, "With the recent reasonable adjustment of the total household loan target, I ask that the expanded financial sector make every effort to ensure that funds for genuine demand are supplied in a timely and stable manner."
He added, "While factors for expanding household loans still exist, speculative demand must be managed more effectively, and financing should be more readily available for those actually building homes and genuine homebuyers."
Lee also noted that the adjustment of the total loan target is intended to support genuine demand and should not signal an encouragement of speculative lending. He stressed the importance of the financial sector being attentive to borrowers affected by regulations, as these rules directly impact their funding plans.
Furthermore, he called for staff training and system maintenance to prevent confusion in operations, anticipating potential customer inconveniences and complaints.
Lee urged active participation in expanding housing supply and normalizing project financing (PF) sites, emphasizing the need for prompt adjustments to the total loan targets by the Financial Supervisory Service to ensure timely funding for genuine demand.
In response, the financial sector pledged to diligently implement the measures. The Financial Supervisory Service stated, "To promote housing supply, we will quickly prepare detailed plans to temporarily relax capital ratio regulations for residential projects and closely manage the normalization plans for each project within the sector-specific normalization fund, as well as establish a support center for resolving PF issues."
Organizations such as the Korea Housing Finance Corporation, Korea Housing Guarantee Corporation, and SGI Seoul Guarantee announced plans to significantly increase guarantee supply for PF operators to 23 trillion won this year and 33 trillion won next year, while also expanding policy financing and guarantee support for newlywed households and young people.
The Korea Banks Association stated, "We will strengthen efforts to ensure sufficient funding related to housing supply while consistently maintaining self-regulation efforts regarding credit loans."
Meanwhile, as banks have tightened household loan criteria, the increase in household loans in July has slowed. The total increase in household loans across the financial sector was 6.2 trillion won, down 2.1 trillion won from the previous month. The slowdown was primarily driven by mortgage loans and credit loans. Overall mortgage loans increased by 3.5 trillion won, a decrease from the previous month's increase of 4.5 trillion won. Other loans, including credit loans, also saw a decline of 1.1 trillion won compared to the previous month.
* This article has been translated by AI.
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