Korea Land & Housing Corporation (LH) has begun arranging relocation loans for the urban public complex project (urban complex project) in key areas of Seoul. The urban complex project is a type of public redevelopment in which the public sector participates in dwellings projects and, for station areas, quasi-industrial zones, and low-rise residential areas where private redevelopment is difficult due to low profitability, offers benefits such as higher floor area ratios and shorter project timelines.
According to the development industry on the 21st, LH's Special Headquarters for Metropolitan Area Maintenance Projects is selecting financial institutions to provide relocation loans for the urban public dwellings complex district on the west side of Ssammun Station in Seoul and the Singil 2 urban complex project district. The urban public dwellings complex district on the west side of Ssammun Station in Seoul is a project to create 1,404 households within 41,325 square meters around 138-1 Ssangmun-dong, Dobong-gu, with 746 owners of land and other assets. The Singil 2 urban complex project district is a project to create 1,332 households on 60,704 square meters around 205-136 Singil-dong, Yeongdeungpo-gu. There are 631 owners of land and other assets. For the Singil 2 urban complex project, one of the commercial banks has been selected as the relocation loan institution and a final contract is imminent. However, for the urban complex project on the west side of Ssammun Station, no institution has stepped forward to provide relocation loans.
In the urban complex project, after owners of land and other assets and LH sign an in-kind compensation contract, they prepay old dwellings or land in kind and later receive a right to move into the apartments to be built. Both sites aim to sign in-kind compensation contracts in September and proceed with relocation in January next year. If relocation funds are not properly secured, the project could face setbacks. For this reason, owners of land and other assets and LH are looking for financial institutions to provide relocation loans.
Relocation loans are made using the right to move in—received after owners of land and other assets prepay their existing assets (land·dwellings) to LH in kind—as collateral. Both business sites received project plan approval in Dec. 2024, and because project plan approval is recognized as equivalent to management and disposition approval, they were exempted from the relocation loan regulations in the June 27 measures announced on June 27, 2025. As a result, relocation loans are available up to 70% of the value of the right to move in. For example, if the right to move in received after in-kind prepayment is valued at 1 billion won, one can receive up to 700 million won.
Earlier, in the June 27 measures, the government capped the loan limit in the Seoul metropolitan area and regulated areas (including basic relocation loans, excluding additional relocation funds supported by builders) at up to 600 million won. It also decided to apply a 40% loan-to-value (LTV) ratio for relocation loans. Previously, there was no loan limit for relocation loans, and the LTV ratio was up to 80% in non-regulated areas and around 40%–50% in regulated areas.
However, exceptions were applied to business sites that obtained management and disposition approval before June 27, 2025, when the measures were announced. The urban complex project, which proceeds via expropriation, does not have management and disposition approval. The government decided not to apply the relocation loan limit, treating it as equivalent to management and disposition approval, for urban complex project establishments that obtained project plan approval before June 27 last year.
Song Seung-hyeon, head of Urban and Economy, said, "With jeonse and monthly rents continuing to rise recently, stable provision of relocation loans is necessary for evictions in redevelopment areas to proceed and for projects to gain speed."
Hwang Jae-seong, chair of the National Regional Solidarity for Urban Complex Projects, said, "Among the urban complex project sites, those that obtained project plan approval after June 27 last year or have not yet obtained project plan approval are subject to the government's relocation loan regulations and are being greatly affected in their project progress," adding, "The government is promoting the urban complex project as one of the key policies for dwellings supply, but restricting relocation loans to block move-outs and demolitions is contradictory."