The Ministry of Land, Infrastructure and Transport said on the 20th that a "special promotional product for early-stage project cost loan" to support reconstruction and redevelopment promotion committees and associations is gaining popularity. Two months after the program began, 30% of the annual budget has been used.
The special promotional product for early-stage project cost loan was newly created last year to ease the financial burden of maintenance projects and support swift progress, with full-scale support starting in March this year.
The special promotional product applies an annual interest rate of 1% and a Korea Housing & Urban Guarantee Corporation (HUG) guarantee fee rate of 0.2–0.4%. The special promotional product applies only to cases where application and approval are completed by Dec. 31 this year. Applications after that will follow the basic conditions for early-stage project cost loan interest rates and guarantee rates. The basic conditions are an annual interest rate of 2.2% and an HUG guarantee fee rate of 1.0–2.1%.
According to HUG, since the launch of the special promotional product, inquiries about product applications from business sites that have completed resolutions to borrow funds through general meetings have increased. Support totaling about 13 billion won has been approved for business sites in Seoul (two), Gyeonggi (two) and Busan (one). Consultation on applications is also underway at about 50 sites nationwide.
An official at a redevelopment promotion committee in Seoul said, "With the launch of the fund product, we were able to resolve difficulties smoothly with a low policy rate."
The Ministry of Land, Infrastructure and Transport (MOLIT) and HUG will operate the special promotional product until this year's project budget (42.25 billion won) is exhausted.
Yoon Young-jung, the Ministry of Land, Infrastructure and Transport (MOLIT) housing maintenance policy director, said, "This special promotional product will provide practical help by enhancing transparency in maintenance project financing while accelerating project speed," adding, "We will continue to provide the necessary support to reinvigorate maintenance projects."