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  • Lowered Standards and Expanded Benefits for “Interest Payment Support for Youths’ Housing Loans” Project

  • SMG 2505

    Seoul is carrying out a general revision of the “interest payment support for youths’ housing loans,” a project implemented for the first time in the nation for young people who suffer from living in a poor housing environment due to the difficulty in making large sums of money. The city will expand the credit limit and lower the standards of the annual income, which are the qualifications to apply, in order for more youths to receive the support benefits.

    The greatest change in this revision is the expansion of the credit limit, which will be raised to up to KRW 70 million within 90% of one’s security deposit. This amounts to about the third the existing credit limit, KRW 25 million. One’s self-funded interest will be fixed at an annual 1%, as the city of Seoul will offer support for 2% interest.

    Additionally, the qualification standards to apply for the project will be eased. The annual income ceiling, which is a standard for applying, will be raised from KRW 30 million to KRW 40 million. Every young person who is working or has working experience can also apply for support regardless of their working period, as the old criterion of a five-year working period will be removed. The parental income qualification standards for those who are seeking jobs or university/graduate students will be relaxed from KRW 60 million to KRW 70 million.

    Furthermore, security for applying for the project will be reinforced. Before, applicants had to apply for the loan only after they had signed a lease agreement, which meant they had to take the risk of breaching the contract should they not be eligible for the loan after the lender’s deliberation. The system will be ameliorated so that applicants can check their qualifications for the loan and the loan amount at a bank or through a banking app before actually applying for the loan. This will minimize the risk of being rejected from receiving the loan.

    The process of application will be streamlined even further. When an applicant obtains a reference from the city of Seoul after he or she passes the qualification screening regarding one’s age, income, and other factors, he or she can receive a loan at a branch of KEB Hana Bank or via the mobile app right after signing a housing agreement. The cooperation of KEB Hana Bank will greatly improve applicants’ convenience as they can now advance through all of the proceedings online–prequalifying and applying for the loan, and loan screening.

    Starting on February 25, 2020 (Tues.), Seoul will actively proceed with the new interest payment support for youths’ housing loans with the improvements mentioned above.

    Any young person who wants to apply for the “interest payment support for youths’ housing loans” project of Seoul, submit the application form on the website of Seoul Housing Portal (http://housing.seoul.kr/). To receive related advice, contact the “Seoul Housing Lab” or call the “Seoul Dasan Call Center” at 120.

    <Major Changes for Expansion of Interest Payment Support for Youths’ Housing Loans>

    1. Credit Limit: KRW 25 million → KRW 70 million
    2. Interest Adjustment: 1-3% depending on applicant’s credit → 1% regardless of applicant’s credit
    3. Income Standards: less than KRW 30 million (applicant’s income) → less than KRW 40 million (applicant’s income)
      * Parents’ income for job seekers & university/graduate students: less than KRW 60 million → less than KRW 70 million
    4. Standards of Working Period: shorter than “five years” for working youths → standards of working period repealed
    5. Risk Reduction: impossible to check if the loan is available before signing a housing contract → possible to check if the loan is available before signing a housing contract
    6. Streamlined Process: online loan application not available → online loan application available