Curbing Public Loans While Handing Out 'Sweet Loans' Behind the Scenes... A 'Disappointing Twist' Despite Vows to Stabilize Housing Prices

The Korea Housing and Urban Guarantee Corporation (HUG), an affiliate of the Ministry of Land, Infrastructure and Transport, carries out housing-related guarantees and policy projects.

It provides employees with housing purchase loans of up to 200 million won, with an interest rate of 2.5% per annum and a repayment term within 20 years.

This year, 13 employees received 1.9 billion won in loans.

The problem is that this goes against government guidelines.

The Ministry of Economy and Finance set a per-person limit of 70 million won for public institution employee housing loans back in 2021.

Interest rates must be set at or above the bank household loan rate announced by the Bank of Korea, which stands at 4.39% per annum or higher based on this quarter's criteria.

A full inspection of 30 public institutions under the Ministry of Land, Infrastructure and Transport revealed that the Korea Housing and Urban Guarantee Corporation, the Korea Real Estate Board, and the Korea Land and Housing Corporation (LH) have been operating in-house loan programs in violation of the guidelines.

The Korea Real Estate Board offers housing loans of up to 140 million won at an interest rate of 2.2% with a repayment period of up to 15 years.

In the first half of this year alone, 15 employees received 2.01 billion won in loans.

At LH, the main agency responsible for housing supply, the scale of loans provided to employees on terms more favorable than government guidelines reached 7 billion won for 93 employees in the first half of this year.

Ordinary citizens, who find it difficult to secure bank loans due to the government's tightened management of household debt, feel a sense of relative deprivation.

[Interview / Lee Yong-jae, Yeonsu-gu, Incheon: "Blocking everything they can while giving out loans among themselves feels a bit unfair."]br />
In-house loans are not factored into the Debt Service Ratio (DSR), which also undermines the effectiveness of loan regulations.

[Interview / Kang Dae-shik, National Assembly Land, Infrastructure and Transport Committee (People Power Party): "Inside public institutions, housing loans more favorable than government standards continue to be provided. I believe the Ministry of Land, Infrastructure and Transport should conduct a full inspection and immediately improve the system."]br />
The public institutions explained, "Revising in-house loan regulations requires the consent of the labor union, which has delayed the implementation of the guidelines."

While violating the guidelines can result in point deductions in management performance evaluations, critics point out that since the points associated with in-house loans are minimal, the effectiveness of the penalties needs to be enhanced.

(Reported by Jeon Hyeong-woo | Produced by Lee Seyoung | Camera Filming by Lee Moo-jin, Lim Woo-shik | Video Editing by Kim Ho-jin | Design by Yeji Kim | Produced by SBS Digital News)
※ Please note: This article was translated by AI and may contain errors.