Apartment listings have emerged in Gangnam-gu, Seoul, advertising that the seller can provide up to 2 billion won in loans to the buyer.
This includes a listing for a 104.9-square-meter exclusive area unit at "Acro Samsung" in Samseong-dong, Gangnam-gu, with an asking price of 7.39 billion won.
Another listing for a 4.45-billion-won unit at "Resens" in Jamsil-dong, Songpa-gu, also came with a notice stating that seller financing is available.
As financial authorities implement stringent total household loan regulations, raising the hurdles at commercial banks, properties offering seller-provided financial terms are popping up in parts of Gangnam, Seoul, and Gyeonggi Province.
Seller financing is a method where the buyer borrows a portion of the purchase price from the seller and receives ownership, while the seller establishes a collateral mortgage on the property to secure the debt.
Sellers can earn interest income depending on the terms, while buyers can secure funds that they could not cover through commercial bank loans.
Currently, in regulated areas, if a home price exceeds 1.5 billion won, the mortgage limit is capped at 400 million won; if it exceeds 2.5 billion won, it is limited to 200 million won.
With a wide gap between home prices and bank loan limits, funds for purchasing homes that cannot be met through the financial sector are being sourced outside the regulated system.
Housing funds moving outside of banks can also be seen in corporate in-house loan programs.
According to data submitted by SGI Seoul Guarantee to the office of People Power Party lawmaker Kim Sang-hoon, guaranteed amounts for private-sector corporate in-house loans reached 891.2 billion won in the first half of this year, marking a 27.8% increase compared to the same period last year.
Among these, housing funds accounted for 660.3 billion won, or 74.1%.
A commercial bank official stated, "Housing demand has not disappeared; only the amount that can be borrowed from banks has decreased," adding, "As even borrowers with sufficient repayment capacity under the Debt Service Ratio (DSR) regulations are blocked from getting loans due to total volume caps, they are turning to funds outside the banking sector, such as corporate in-house loans, family borrowings, or seller financing."
The official further pointed out, "Peer-to-peer lending lacks standardized borrower protection mechanisms, so as the scale grows, the risks of disputes and defaults can also accumulate."
Reported by Jung Da-eun | Video by Seo Byeong-wook | Graphics by Lee Jeong-ju | Produced by SBS Digital News
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