As Loans Dry Up, "Short on Cash? I'll Lend You 2 Billion Won"

Apartment listings have emerged in Gangnam-gu, Seoul, advertising that the seller can provide a loan of up to 2 billion won.

One such listing is for a 104.9-square-meter unit at Acro Samsung in Samseong-dong, Gangnam-gu, with an asking price of 7.39 billion won.

Similarly, a listing for a unit at Resens in Jamsil-dong, Songpa-gu, with an asking price of 4.45 billion won, also features a note stating that seller financing is available.

As financial authorities implement stringent household debt quota regulations, raising the hurdles at commercial banks, properties featuring seller-provided financial terms are popping up in Gangnam and parts of Gyeonggi Province.

Seller financing is a method where the buyer borrows part of the purchase price from the seller before transferring ownership, and 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 loan limit is restricted to 400 million won, and for homes exceeding 2.5 billion won, it is limited to 200 million won.

Because of the wide gap between housing prices and commercial loan limits, buyers are filling the shortfall in home purchase funds outside the formal financial sector.

Housing funds moving outside of banks can also be seen in corporate in-house loans.

According to data submitted by SGI Seoul Guarantee to the office of People Power Party lawmaker Kim Sang-hun, guarantees for private corporate in-house loans reached 891.2 billion won in the first half of this year, a 27.8% increase from the same period last year.

Among these, housing funds accounted for 660.3 billion won, or 74.1%.

An official from a commercial bank said, "Housing demand has not disappeared; only the amount that can be borrowed from banks has decreased," adding, "Even borrowers with sufficient repayment capacity under the DSR regulations are unable to get loans due to aggregate limits, leading them to seek funds outside the banking sector, such as in-house loans, family borrowings, or seller financing."

The official also pointed out, "Peer-to-peer lending lacks standardized borrower protection mechanisms, so as the scale grows, the risks of disputes and default can also accumulate."

Reported by Jung Da-eun | Video by Seo Byeong-wook | Graphics by Lee Jeong-ju | Produced by SBS Digital News
※ Please note: This article was translated by AI and may contain errors.