"Up to 500 Million Won at 1.5% a Year, Only for Homes at or Below the National Standard Apartment Size"... Why Samsung Electronics Imposed Limits

[Financial News] Samsung Electronics has decided to limit the homes eligible for its company loan program for employees without housing to units at or below the national standard apartment size in the Capital Region and major cities.
According to Yonhap News Agency on the 5th, Samsung Electronics will restrict the program’s eligible homes to units of 85 square meters or less in the Capital Region and six major cities nationwide.
The move comes after criticism that a program offering large housing loans at low interest rates could bypass market lending rules and fuel home price increases in the Seoul metropolitan area.
Samsung Electronics is expected to launch the loan program within this month after finalizing details with the Samsung Electronics Branch of the Supra-Enterprise Labor Union, its largest union.
Earlier, Samsung Electronics decided in May, through labor-management talks, to introduce an in-house loan program that would provide up to 500 million won in housing funds per job grade at an annual interest rate of 1.5%.
At the time, labor and management agreed that details such as the amount of housing support, eligibility, and the implementation schedule would be determined by the company. Based on that agreement, the union has decided to accept the new housing size limit. It is also reportedly considering a plan to abolish the loan cap by job grade and unify the maximum loan amount at 500 million won.
Samsung Display, which had already introduced a similar in-house loan program for employees without housing under the same terms as Samsung Electronics, with a maximum of 500 million won and a 1.5% interest rate, also decided to limit loans to homes of 85 square meters or less in the Capital Region and metropolitan cities after a union vote held from the 1st to the 3rd.
The reason Samsung Electronics and others have limited eligible homes to the national standard apartment size is the concern that large housing loans do not align with the financial authorities' tightening stance on lending and could further drive up home prices.
For Samsung Electronics alone, projections suggest that an average of 36.6 trillion won could flow into the real estate market by next year when performance-based bonuses of 7.6 trillion won and the company’s total loan volume of 29 trillion won are combined.
There are also concerns that in-house loans could deepen market distortions because they fall into a regulatory blind spot. Since such loans are classified as private lending under employee welfare programs, they may be exempt from regulations such as the Debt Service Ratio (DSR), which is used to determine lending limits in the financial sector.


bng@fnnews.com Kim Hee-sun Reporter