On the 7th, Choi In-ho, president of the Korea Housing & Urban Guarantee Corporation (HUG), said the agency will "leap forward as a public platform for dwelling supply and housing finance that comprehensively supports people's housing stability," adding, "Beyond our guarantee function, we will directly supply quality rentals by using the Dundeon jeonse dwellings and a rental REITs (real estate investment trust) model."
HUG is currently supporting an expansion of dwelling supply through various guarantee products for individuals and businesses, and it plans to go further by actively pursuing businesses that directly supply rental dwellings. HUG also plans within the year to launch new products that guarantee relocation costs and cost-sharing for housing regeneration and that guarantee project cost loans for public redevelopment, strengthening its core role of promoting dwelling supply.
At a press briefing marking 100 days in office held at a restaurant in Sejong on the 7th, Choi said, "We plan to carry out several projects to reliably support Lee Jae-myung's dwelling supply policy," outlining these plans.
◇ HUG-style rental dwelling REIT to be created
Choi unveiled plans to expand HUG's function of directly supplying dwellings. "HUG now needs to become an institution that goes beyond a guarantee function," Choi said, stressing, "We will strengthen the function of directly supplying dwellings through Dundeon jeonse dwellings and HUG-style rental REITs."
Last year, HUG supplied about 1,800 "Dundeon jeonse dwellings," mainly in the greater Seoul area, and plans to expand that to 3,000 units this year. Dundeon jeonse dwellings are rental dwellings that HUG directly acquires at auction after repaying the tenant's jeonse deposit in their stead and supplies them at prices lower than surrounding market rates. "Previously, the focus was on villas and multi-household buildings, but we have revised internal rules so we can also purchase apartments of 150 units or more going forward," Choi said, adding, "We have established a base to supply rental dwellings that the middle class can also move into."
It will also expand the public-support private rental REITs program for fund equity investment. Under this system, a REIT established with equity from the housing & urban fund and the private sector supplies rental dwellings. Through this, HUG plans to approve fund equity investments for groundbreaking of 21,000 units by 2030.
In particular, HUG is actively reviewing a HUG-style rental REITs program. Unlike the public-support private rental REITs program that injects housing & urban fund resources, the HUG-style rental REITs program uses HUG's own capital. With unsold inventory worsening recently, especially in non-capital regions, and builders increasingly favoring private rental projects, HUG is actively looking at the HUG-style rental REITs program with a lower equity ratio than public-support private rental REITs.
Choi said, "We are also planning a HUG-style rental dwelling REITs program," adding, "Beyond fund equity investment, we will create a REIT with HUG's independent resources to supply rental projects. We explained this at meetings with related market participants, including the Developers Association, and it drew significant interest. Some participants even expressed intent to take part."
◇ Expanding supply through system improvements and new guarantee products such as youth安心 dwellings
HUG will also support expanding dwelling supply through guarantees. It plans to increase practical supply within the greater Seoul area through field-centered improvements to the guarantee system. First, it will swiftly supply dwellings by improving the guarantee system for youth安心 dwellings. Some youth安心 dwelling business sites had been completed but could not recruit tenants because guarantee issuance was restricted due to excessive project financing (PF) loans. In response, HUG will improve the system to allow loan repayment after issuing guarantees first, thereby increasing practical supply.
It also established reasonable guarantee standards for HUG's construction rental dwellings so that guarantees can be extended without additional funding burdens even when a developer exceeds the debt ratio. It expanded appraisal institutions so that developers can receive appraisals aligned with objective market prices when seeking guarantees.
"There are 10 business sites that have not recruited tenants even after completion, including about 2,000 units in Seoul," Choi said. "Through system improvements, we expect to help facilitate the supply of 18,000 units in Seoul alone by 2028," Choi said, adding, "We have improved supply conditions for construction rental dwellings across 1,000 business sites totaling 260,000 units."
Support for redevelopment projects in aging planned cities will also be strengthened. Through a dedicated guarantee product for Korea Land & Housing Corporation (LH) private-participation projects and the Future City Fund, HUG plans to support groundbreaking for 63,000 units in preferred areas of the greater Seoul region by 2030.
In particular, it will roll out new products that can accelerate dwelling supply. Within the year, HUG plans to launch ▲ guarantees for housing regeneration relocation costs and cost-sharing ▲ guarantees for project cost loans in public redevelopment ▲ guarantees for rental deposits in senior welfare dwellings ▲ guarantees for securitization by trust companies. "This will help reduce funding burdens at supply sites and speed up project timelines," Choi said.
◇ Push to release "new data" to prevent jeonse fraud
Choi also plans to strengthen HUG's information-provision function for people's housing stability. It will further bolster features to prevent jeonse fraud through the "Safe Jeonse" app. "We will further upgrade the Safe Jeonse app with artificial intelligence (AI) and develop it into a one-stop service that integrates information on property risks and lessors," Choi said, adding, "We will also push to improve the system so that guarantee eligibility is reviewed in advance at the deposit-payment stage."
In particular, HUG also announced plans to promote new data services, including price information for safe villas in non-apartment segments, HUG-certified high-quality jeonse, and a 3D progress digital viewer. "We will use our dataset of 70 billion records to support people's housing stability," Choi said. "We will focus on narrowing information blind spots in the non-apartment segment, where jeonse fraud is concentrated," Choi added. "We will seek national official statistics certification to enhance data reliability and quality," Choi said.