Tight Mortgage Rules for Public, But Generous In-House Loans for Public Agencies

[Anchor]

It has been revealed that public agencies tasked with implementing government housing and land policies have been providing in-house loans to their employees in violation of government guidelines. They were lending larger amounts of money at lower interest rates, sparking complaints of unfairness among ordinary citizens who are blocked by lending regulations.

Reporter Jeon Hyeong-u has the story.

[Reporter]

The Korea Housing & Urban Guarantee Corporation, an affiliate of the Ministry of Land, Infrastructure and Transport, handles housing-related guarantees and policy projects.

It lends up to 200 million won to employees for housing purchase funds at an interest rate of 2.5 percent, with a repayment term within 20 years.

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

The problem is that this violates government guidelines.

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

Interest rates must be set at or above the bank household loan interest rate announced by the Bank of Korea, which has a baseline of 4.39 percent per annum or higher for this quarter.

An exhaustive inspection of 30 public agencies under the Ministry of Land, Infrastructure and Transport revealed that the Korea Housing & 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 provides housing loans of up to 140 million won at an interest rate of 2.2 percent for up to 15 years.

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

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

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

[Lee Yong-jae / Yeonsu-gu, Incheon: Blocking everything they can block while giving out loans among themselves, isn't that a bit unfair?]

In-house loans are not factored into the Debt Service Ratio (DSR), which also diminishes the effectiveness of lending regulations.

[Kang Dae-shik / People Power Party lawmaker (Land, Infrastructure and Transport Committee): Inside public agencies, housing loans more favorable than government standards are still continuing. I believe the Ministry of Land, Infrastructure and Transport should conduct a comprehensive inspection and immediately overhaul the system.]

The public agencies explained, "Revising in-house loan regulations requires the consent of the labor union, which is why the implementation of the guidelines is being delayed."

While violating the guidelines can result in point deductions in management evaluations, critics point out that since the points related to in-house loans are minimal, the system's effectiveness needs to be enhanced.

(Photo: Yonhap News)
(Video by: Lee Moo-jin, Lim Woo-shik | Video Editing by: Kim Ho-jin | Design by: Kim Ye-ji)
※ Please note: This article was translated by AI and may contain errors.