Special Bogeumjari Loan Receives 77,000 Applications Worth 17.5 Trillion in One Month from Its Launch 

- The loan contributes to easing the interest burden for low-income households with real home demand, promoting housing stability, and addressing the reverse lease issue

Korea Housing Finance Corporation (HF, CEO Choi Joon Woo) stated on March 7, 2023, that it received 77,000 applications for the Special Bogeumjari Loan, which amount to a total of KRW 17.5 trillion, as of February 28, 2023, one month after it launched the new loan.

ㅇ By main reason for applying for the loan, loan repayment accounts for 54.9% or 42,000 of the entire 77,000 applications, followed by new home purchases at 37.2% (29,000 applications) and security deposit refund at 7.9% (6,000 applications).

ㅇ An HF official said, “It appears that in addition to those seeking a lower interest burden for their existing loans, people with different needs are applying for the Special Bogeumjari Loan. They include those who have been hesitant to purchase a home due to the recent real estate market dynamics and homeowners who have difficulty in returning security deposits to their tenants due to the recent drop in the jeonse lease amount.”

< Distribution of Applications by Main Reason > 

Low-income earners, low-priced home residents, and those vulnerable to the economic slowdown account for the largest share of all applicants. 

ㅇ In particular, 63.3% of the total applicants, or 49,000 applicants, are those who applied for the preferential Special Bogeumjari Loan after meeting the two qualifications of a combined annual income of KRW 100 million or less and a single home valued at KRW 600 million or less.

 - 14.8% of the entire applications, or 11,000 applications, were made for the preferential interest rate by low-income youth, newlywed couples, those with disabilities, and families with three or more children.

ㅇ To break down the total applications by income and home price: 

 - Those with a combined annual income of KRW 70 million or less account for around 60% (46,000 applications). Those with a combined annual income of KRW 30 million or less account for 10.8% (8,261 applications).

< Distribution of Applications by Income Bracket >

 - Of all the applications, those made for homes valued at KRW 600 million or less account for 72.3% (55,000 applications), while those made for homes valued at KRW 300 million or less account for 18.5% (14,000 applications).

Furthermore, by region, the share of the applicants living in non-metropolitan areas is relatively larger than that for regular mortgage loans taken out at commercial banks. 

ㅇ For regular loans offered by banks, applicants from the Seoul metropolitan area account for 69.8% of all applications, while those from non-metropolitan areas make up 30.2% of the total applications*. 

 * Source: Bank of Korea’s 「Home Loan Balances (Mortgage Loans) at Savings Banks by Region」 as of December 2022

ㅇ The amount of the Special Bogeumjari Loan applications from the Seoul metropolitan area accounts for 62.4% (KRW 10.9 trillion), while that of those made from non-metropolitan regions stands at KRW 6.6 trillion (37.6% of the cumulative amount of applications). This shows that the amount of the applications made by those living in local provinces is around 7%p greater than the typical amount of local applications made for regular home loans at commercial banks. 

< Distribution of Applications by Region > 

An HF official said, “Amid increasing concerns about rising interest rates and the economic slowdown, the Special Bogeumjari Loan helps to partly ease the financial difficulties of low-income households with real home demand. HF will continue to do our utmost to maintain our close cooperation with the banking sector to expand in-person channels so that the loan is available for more and more people.”