Samsung Electronics Limits In-House Housing Loans to 'National Average' Size or Smaller

Samsung Electronics has decided to limit the eligibility for its in-house housing loans for employees who do not own homes to properties with a dedicated area of 85 square meters or less, commonly referred to as the "national average" size, in the Seoul metropolitan area and major cities.
This decision follows repeated criticism that the program, which provides large sums of housing funds at low interest rates, could bypass commercial loan regulations and fuel rising home prices in the capital region.
According to industry sources on July 5, Samsung Electronics decided to restrict the scope of its housing stability support loan program to properties with a dedicated area of 85 square meters or less in the Seoul metropolitan area and the nation's six major metropolitan cities.
Samsung Electronics plans to implement the loan program within this month after finalizing the details with its largest labor union, the Samsung Electronics branch of the Super-Enterprise Labor Union.
In May, Samsung Electronics introduced an in-house loan program through a labor-management agreement that allows employees to borrow up to 500 million won at an annual interest rate of 1.5 percent.
At the time, both labor and management agreed that the company would determine the specific details, including the loan amount, eligibility, and implementation date.
The Super-Enterprise Labor Union has agreed to accept this restriction on housing size.
However, it is reported that in exchange for the size restriction, Samsung Electronics is considering abolishing loan limits based on job rank and unifying the maximum loan amount at 500 million won for all eligible employees.
Samsung Display, which previously introduced an in-house loan program for non-homeowning employees under the same conditions (up to 500 million won at a 1.5 percent interest rate), also decided to limit loans to homes with a dedicated area of 85 square meters or less in the Seoul metropolitan area and major cities following a vote by union members from July 1 to 3.
The backdrop for Samsung Electronics and other companies limiting in-house loans to the "national average" size or smaller is the concern that large-scale housing loans are inconsistent with the financial authorities' regulatory stance and could stimulate home price increases.
For Samsung Electronics alone, there have been projections that an average of 36.6 trillion won could flow into the real estate market, combining performance bonuses (7.6 trillion won) and the total amount of in-house loans (29 trillion won) through next year. Critics have also pointed out that because in-house loans exist in a regulatory blind spot, they could further exacerbate market distortions.
In-house loans are classified as private lending for corporate welfare purposes and can be excluded from regulations such as the Debt Service Ratio (DSR), which serves as the standard for loan limits in the financial sector.
※ Please note: This article was translated by AI and may contain errors.