Can the Funding Freeze in PF Be Eased? Financial Supervisory Service Holds Briefing on Stage-by-Stage Financing Support

[Financial News] The Financial Supervisory Service has gathered comprehensive information on residential real-estate project-financing (PF) sites facing difficulties because of funding shortages. The aim is to connect financing-support programs with the sale of PF sites in one place, seeking ways to bring delayed projects back on track. The limit for PF syndicated loans has been raised to 5 trillion won, while PF development anchor REITs worth 610 billion won will also be used to provide funding.
The Financial Supervisory Service held a briefing on financing-support programs and the sale of real-estate development projects at its headquarters in Yeouido, Seoul, on the 15th. The programs were introduced at the briefing, which followed the housing-supply promotion measures announced on the 13th of last month and was attended by the Korea Land and Housing Corporation (LH), Korea Housing & Urban Guarantee Corporation (HUG), Shinhan Bank, Korea Asset Management Corporation (KAMCO), and KORAMCO REITs Management and Trust.
During the bridge stage, the early phase of a housing-development PF project, KORAMCO REITs Management and Trust will use PF development anchor REITs to provide a total of 610 billion won in financing at lower interest rates than standard bridge loans.
At the stage of transitioning from bridge loans to main PF financing, HUG will provide expanded PF guarantees. Through 2028, HUG will guarantee up to 70% of construction costs nationwide and up to 80% in Seoul. Land costs excluding the borrower’s equity contribution will also be covered. PF guarantees exclusively for small and medium-sized construction companies will be introduced as well.
PF sites experiencing temporary liquidity shortages at any stage of a housing-development project can use PF syndicated loans from banks and insurers. The PF syndicated-loan limit was recently expanded from the previous 1 trillion won to 5 trillion won. Banks and insurers will also provide auction-purchase balance loans for sites sold through auctions and public sales, as well as acquisition financing for sites sold through voluntary sales.
LH will reduce the risk of unsold units by providing land-acquisition and construction costs throughout the project through its purchase-and-rental housing program. If real estate is acquired after signing a purchase agreement with LH, the acquisition-tax reduction will also expand from the current basic rate of 15% to 70% in 2027 and 50% in 2028.
The event also included a briefing on the sale of residential PF sites in the Seoul metropolitan area whose projects had been delayed or suspended, with the aim of restarting them. The Financial Supervisory Service set up 12 consultation booths at the venue to advise on financing-support programs and sites available for sale.
A Financial Supervisory Service official said, "Going forward, we plan to assign a person in charge to each residential PF site and connect it with relevant support programs whenever financing difficulties arise. For troubled sites with insufficient project viability, we will support the resumption of housing projects by improving their viability through restructuring and resolution."

[email protected] Park Moon-soo Reporter