The government is enhancing support for the financial and construction sectors to normalize real estate project financing (PF) and increase housing supply. Starting next month, a dedicated support center will be established to address financial difficulties faced by PF and construction companies, and the government has requested that financial institutions expand funding for new construction projects.
On August 28, the Financial Services Commission (FSC) and the Ministry of Land, Infrastructure and Transport (MOLIT) held a regular meeting with the financial and construction industries to discuss follow-up measures from the August 13 real estate finance policy and ways to stimulate private housing supply.
The government plans to add over 230,000 housing units by utilizing new sites in the metropolitan area. To support this, it will suspend the application of PF regulations on residential projects and expand the target for PF guarantees. Additionally, the method for assessing collateral value for relocation loans will be improved.
The FSC aims to implement 11 of the 20 follow-up tasks within this month. This includes securing a budget for the Korea Asset Management Corporation (KAMCO) fund and revising relevant laws, such as the Korea Housing Finance Corporation Act. The financial sector has also been asked to reform the syndication loan system and create additional sector-specific funds.
Efforts to normalize troubled PF projects will continue. The Financial Supervisory Service (FSS) will assess the self-normalization plans of distressed residential projects in the metropolitan area and analyze the causes of project delays to encourage normalization.
A dedicated support center will be established to directly address financial difficulties. Starting September 1, the existing real estate PF comprehensive support center will be expanded into a 'PF Financial Difficulty Resolution Center.' This center will include teams for evaluation management, syndication loans, and system improvements, handling issues directly or referring them to relevant agencies for resolution.
On the same day, the Korea Development Bank will operate a 'Construction Company Financial Difficulty Resolution Center.' This center will collect financial inquiries and issues from construction firms and either address them internally or request reviews from financial associations.
The MOLIT has urged the financial sector to actively supply funds not only for simple real estate PF but also for new construction projects that significantly contribute to economic growth and job creation. The financial sector has expressed its commitment to support housing supply in line with the government's policy intentions.
FSC Vice Chairman Kwon Dae-young stated, “The financial sector must ensure a reliable supply of funds for housing, and the government and related agencies must swiftly implement follow-up measures. I also encourage the construction industry to actively raise financial issues on-site.”
MOLIT First Vice Minister Kim I-tak emphasized, “Smooth funding support is essential for expanding housing supply,” adding, “This meeting will serve as an opportunity for the MOLIT, FSC, construction industry, and financial sector to collaborate in achieving supply targets.”
* This article has been translated by AI.
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