No Signs of the August 31 Measures for Low Income Individuals

Measures to support the low income individuals without houses included in the “August 31 Real Estate Comprehensive Measures” have not yet been implemented, setting back the plans of people who have already signed contracts to buy a house or who had planned to move.

The government commented that it still is consulting with the concerned organizations and has yet to announce an exact date for implementation.

When announcing the comprehensive measures on real estate in late August, the government promised the following as measures to stabilize the housing of people who don’t own: resume supporting those who are buying their first house, lower interest rates for rent loans for the low income people, lower the interest rate of Korea Housing Finance Corporation’s mortgages to low income people without houses, among others.

In particular, the government announced that it would resume supporting mortgages for those buying their first house in October, using funds from the National Housing Fund. Since lowering rates for low income individuals loans come from the same fund, it was expected to be implemented in October.

But as of October 24, currently none of the measures to help people obtain housing have been exercised.

Many prospective new house owners are waiting for the realization of mortgages that are one percent lower than the market rate that are allotted to those buying their first house smaller than 18-pyeong.

Thirty seven year-old office worker Kang, who believed in this system and signed a contract to buy a small apartment, feels exacerbated since, under the terms of the sales contract, he has to pay 100 million won by early November.

Questions about the mortgage to buy the first house, such as by Kang, are being continuously posted on the websites of the Ministry of Finance and Economy and Ministry of Construction and Transportation.

Kim Tae-jin posted, “I have been inquiring about when the mortgage will come to effect for over a month, but the answer I get is always the same: ‘The concerned organizations are still in discussion.’ What will happen to those people who have already concluded contracts believing that it would resume in October?”

Kookmin Bank, Woori Bank, and Nonghyup, banks that are loaning rent money, are being continuously asked the question, “When will the interest rates decrease?”

According to the August 31 measures, the loan interest rates for low income people will decrease from an annual three percent to two percent, and from five percent to 4.5 percent for the working class. However, citing that the date of implementation has not yet been determined, the banks are still applying the current rates, raising tension with customers.

Mortgage rates for a household earning less 20 million won per year were supposed to be lowered by 0.5 to one percent from the current annual rate of 6.5 percent, but this has also yet to be implemented.

An official of the Korea Housing Finance Corporation said, “Recently, the market interest rate has greatly increased, and if loan rates are lowered by one percent, we might suffer losses so we are discussing with the government on how to deal with such losses. Hence it will take more time until the implementation.”

Ministry of Construction and Transportation Housing Welfare Headquarters Chief Kang Pal-moon commented, “The loans to those buying their first house in their lives and mortgages for the low income individuals all use the National Housing Fund so we can only implement it after finishing discussing it with the Ministry of Planning and Budget. We will do our best to implement the measures as soon as possible.”