Seoul city said on the 27th that it will launch a program to provide loan support for initial project costs to help moa dwellings that face difficulties raising funds at the start of a project.
Moa dwellings is Seoul city's small-scale housing maintenance project model in which neighboring owners in aging, low-rise residential areas—where large-scale redevelopment is difficult—pool individual lots and jointly develop them by block.
Until now, small-scale maintenance project associations have relied on Korea Housing & Urban Guarantee Corporation (HUG) fund loans, but as more project zones have moved forward recently and funds have run short, there have been limits to support.
Accordingly, the city will provide loans to associations under the Small-scale Housing Maintenance Act for street housing maintenance projects and small-scale reconstruction and small-scale redevelopment that are between approval for association establishment and approval for the project implementation plan.
They can borrow up to 2 billion won per zone, within 5% of total project costs, at an annual interest rate of 2.2%. The loan can be used for early-stage needs such as association operating expenses, design fees, service fees, and general meeting expenses.
Associations seeking a loan should submit an application and required documents to the maintenance project department of the relevant district office from the 7th to the 28th of next month. The loan period is three years from the loan date, and if approval for the project implementation plan is not obtained within this period, it can be extended, with Seoul city's approval, in one-year increments for up to four more years, allowing loans for a total of seven years.
However, zones that have already received HUG initial project cost loans cannot apply for Seoul city loans due to restrictions on duplicate support.