Banks have partially eased Didimdol loan rules only for buyers who made an early application for leasehold land sale dwellings. Even if a couple's combined annual income exceeds the threshold, they will not apply a margin rate, and the loan-to-value ratio (LTV) will be up to 80%.
According to the financial sector on Dec. 12, commercial banks including KB Kookmin, Shinhan, Hana, and Woori began enforcing revisions to the Didimdol loan terms with these details on the previous day.
The revisions apply only to buyers who made an early application for leasehold land sale dwellings. Buyers who won allocation in the main application conducted after the early application are subject to the existing loan rules. Under the revisions, main applicants are charged a 0.3 percentage point (p) margin rate if a couple's combined annual income exceeds 85 million won, but early applicants are exempt.
For LTV as well, main applicants are subject to 60% and early applicants to 80%. Early applicants are allowed a loan limit of up to 500 million won regardless of the dwelling price. The rule requiring full repayment of existing debt when the borrowing couple's combined asset exceeds the 511 million won standard by more than 100 million won also excludes early applicants. Didimdol loans are available only for dwellings with an exclusive residential area of 85 square meters or less and an appraised value of 500 million won or less as of the loan application date (600 million won for newlyweds, families with two or more children, first-time buyers, and youths; 900 million won for newborns).
Leasehold land sale dwellings are homes in which the developer, such as the Korea Land & Housing Corporation (LH) and city corporations, secures ownership of the land but sells only the dwelling ownership. In general sales, the buyer secures both the dwelling and a share of the land, but in leasehold land sale dwellings, the buyer purchases only the dwelling and pays land rent to the developer.
After some applicants gave up contracts over loan issues at Magok Complex 17 and Godeok-Gangil Complex 3, which are being built by the Seoul Housing and Urban Development Corporation, banks lowered the threshold for Didimdol loans only for early applicants. Instead, main applicants who applied after the loan rules took effect will be subject to the existing rules. Didimdol loans for leasehold land sale dwellings have been in effect since Nov. 1.
SH said it has been continuously asking the government to ease loan conditions for main applicants as well. SH said, "Because leasehold land sale dwellings aim to expand the housing ladder, we will continue to propose easing loan conditions for main applicants."