South Korean housing authorities expand PF guarantees and purchase programs

South Korean financial and housing authorities are implementing measures to stabilize the real estate market and boost housing supply following government directives.

The Korea Housing Finance Corporation (HF) announced it will increase the guarantee ratio for real estate project financing (PF) to 100% through the end of 2027. This expansion aims to improve liquidity for construction sites by increasing the coverage provided to financial institutions. Additionally, HF is relaxing criteria for projects involving high-priced homes and mixed-use developments, such as officetels, to ensure broader access to funding. Guarantee fees will also be reduced, with potential discounts of up to 40% for projects that commence construction early.

Concurrently, the Korea Land and Housing Corporation (LH) is advancing the government’s August 13 housing measures through new initiatives for purchasing residential properties. LH will host briefing sessions to guide private developers and financial institutions on improved price calculation methods, including the use of cost-based methods in regulated metropolitan areas to reflect rising construction costs. LH is also lowering entry barriers for housing purchase applications by reducing land ownership requirements and easing document review standards to accelerate the supply of urban housing.