HF lowers the thresholds for non-recourse loans

- Annual income limit of KRW 85M for the newlyweds and max. KRW 100M for families with multiple children

 - The loans are to return the rent deposit as well as to purchase a house or redeem a debt

- Simplified deliberation process for multiplex, row, and detached houses

Korea Housing Finance Corporation (HF, CEO Choi Joon Woo) announced on 29 April the alleviation of the eligibility criteria for its ‘non-recourse Bogeumjari Loans’.

Previously, households whose combined annual income exceed KRW 70 million could not take out non-recourse Bogeumjari loans. With the amended criteria, newlywed couples with annual income of KRW 85 million or less can apply for the limited recourse loans. The annual income limit for the households with multiple children is expanded up to KRW 100 million, depending on the number of children. 

* Annual income limit : KRW 80 million for families with one child, KRW 90 million for families with two children, and KRW 100 million for families with three or more children 

In addition, the loan limit which used to be fixed at max. of KRW 360 million regardless of the number of children, is now increased to KRW 400 million for families with three or more children. 

Furthermore, the purposes of non-recourse Bogeumjari loans now include the return of rent deposit (for preservation). Previously, the loans could be used only for a house purchase or a loan redemption.

[Revised Eligibility Criteria for Non-Recourse Loans]

In addition, whereas the previous loan deliberation looked into the elapsed years of collateral houses and the increase rate of households in the region for screening, HF changed the bylaws to grant loans to row houses, multiplex, and detached houses, regardless of the deliberation scores. 

HF released the non-recourse Bogeumjari loans in May 2018 for housing stability and economic recovery of the low-to-moderate income households and the end users. Since then, HF has improved the product to allow the loans for owners of two houses under the condition of prompt disposal of a house (Oct, 2020) and for the loans to be used to make debt repayment (July, 2021)

Accordingly, total KRW 25.8 trillion of non-recourse Bogeumjari loans have been disbursed as of 2021, and the annual share of the loans largely expanded from 4.2% in 2018 to 48.1% in 2021. 

[Reference : Annual Supply Vol and Share of Non-Recourse Bogeumjari Loans]

HF CEO Choi commented, “The alleviation of the eligibility criteria of non-recourse loans is a reflection of our commitment to financial consumer protection and financial inclusion. With the changes, we hope the financial safety net of our society has been further enhanced.