▲ Financial Services Commission
The financial authorities are accelerating housing supply efforts after wrapping up regulatory improvements last month, such as enhancing fund supplies for viable business sites and easing relocation loan regulations.
The Financial Services Commission (FSC) held a meeting today (the 9th) presided over by Jeon Yo-seob, Director General for Financial Policy, to review the implementation status of 21 detailed tasks concerning the supply sector under the August 13 real estate measures.
Out of the total tasks, the FSC completed 12 last month and plans to swiftly wrap up the remaining tasks, including budget measures and revisions to laws related to the Korea Housing Finance Corporation Act and project financing (PF) loan securitization.
First, the scale of PF guarantee supplies and construction cost plus PF guarantees were expanded immediately.
Cuts to guarantee fees, expansion of guarantee ratios for housing business sites, inclusion of quasi-housing in guarantee requirements, realistic adjustment of guarantee limits for high-priced homes, rationalization of the calculation method for the loan-to-value (LTV) ratio on relocation loans, and strengthened financial support for housing sales and rental businesses were completed on August 31.
Tasks requiring cooperation from the financial sector have also been finalized.
The kick-off meeting for regular consultation sessions between the financial and construction industries was held on August 28, and it was decided to actively execute market stabilization programs.
In addition, a center for resolving financial difficulties faced by PFs and construction companies will operate at the Financial Supervisory Service and the Korea Development Bank starting from the 1st.
Discussions with the financial sector on recognizing exceptions for total volume management, including relocation loans, have also been concluded.
Detailed checks were conducted on tasks requiring implementation by related institutions such as the Financial Supervisory Service and the Korea Housing Finance Corporation, as well as the stable establishment of institutional improvements.
The regulation on the PF debt-to-equity ratio will be temporarily suspended for two years to promote housing supply.
In relation to this, considering the impact on the PF market from the suspension of soundness-strengthening measures—such as risk-weight adjustments, provisioning, and limits on loan handling—detailed plans are scheduled to be announced as early as September after gathering industry opinions.
The debt-to-equity ratio regulation targeting non-housing business sites will be introduced as scheduled in 2027, and existing soundness regulations by financial sector will also be maintained.
Regular working-level meetings regarding syndication loans are underway with the banking and insurance sectors, and plans are in place to materialize improvement measures, including investment targets and structures.
Designation of managers for each PF business site and selection of targets for close monitoring have been completed at the Center for PF Business Site Management and Resolution of Financial Difficulties, and a close management system will be operated for each site.
To additionally establish self-funded funds worth 7.3 trillion won by the financial sector, creation plans by sector are currently being compiled. In the case of the securities industry, it plans to additionally create self-funded funds worth 2.1 trillion won within the year.
The FSC explained the institutional improvement matters by sector, and tasks such as establishing new guarantee products for redevelopment projects and rental businesses, as well as agreement-based guarantees with the insurance sector, are also being promoted.
The budget of 500 billion won for the KAMCO PF Normalization Support Fund is currently under deliberation by the National Assembly. Once the budget passes, the FSC plans to issue a public notice for fund managers in October and complete selections within the year to swiftly create the KAMCO fund.
The 1st fund that was already in operation also plans to swiftly complete investment execution, centered around housing business sites.
(Photo provided by the Financial Services Commission, Yonhap News)
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