The financial authorities are formalizing weekly review meetings to expedite the implementation of financial support measures aimed at expanding housing supply. Following the completion of 12 out of 21 detailed tasks outlined in the August 13 financial comprehensive plan last month, the focus will now shift to monitoring the progress of remaining tasks, including the temporary suspension of project financing (PF) equity ratio regulations and the expansion of PF guarantees and financial sector self-funds.
On September 9, the Financial Services Commission (FSC) held a meeting to review the progress of the housing supply promotion financial support measures and future plans related to the August 13 financial comprehensive plan.
According to the FSC, 12 of the 21 tasks were completed in August. The commission plans to promptly finalize remaining tasks, including the revision of the Korea Housing Finance Corporation Act and the budget for the Korea Asset Management Corporation (KAMCO) fund.
Notably, the equity ratio regulation applicable to residential project financing will be temporarily suspended for two years to promote housing supply. The FSC plans to announce detailed measures, including adjustments to risk weights, provisions, and lending restrictions, based on feedback from the financial and construction sectors as early as this month.
However, the equity ratio regulation for non-residential projects, which have a relatively high default rate, will be implemented as scheduled in 2027, and existing soundness regulations for each sector will be maintained.
The designation of responsible personnel for each PF project and the selection of closely monitored targets have also been completed. The financial authorities plan to quickly identify and support funding difficulties in the field through the 'PF and Construction Financial Difficulty Resolution Center,' which has been operational since September 1.
Efforts to expand syndicate loans are also underway. Regular working meetings with banks and insurance sectors will be held to improve investment targets and structures and to develop detailed plans.
Additionally, the financial sector will create more self-funds. Currently, plans for a self-fund totaling 7.3 trillion won are being compiled, with the securities industry expected to establish an additional self-fund of 2.1 trillion won by the end of the year.
PF guarantees will be expanded in terms of supply scale and guarantee ratios, and the requirements for guarantees on high-priced and semi-residential properties will be improved. New guarantee products for maintenance projects and rental businesses will also be pursued, along with agreements for insurance sector guarantees.
Support for the normalization of PF by KAMCO will continue. With a budget of 500 billion won for next year's KAMCO fund currently under review by the National Assembly, the financial authorities plan to announce a recruitment notice for operators in October in anticipation of budget approval and aim to complete selections by the end of the year. The existing first fund will also focus on completing investments primarily in residential projects.
Jeon Yo-seop, head of the FSC's Financial Policy Bureau, stated, "Tasks that can be immediately implemented following the announcement of the August 13 measures are being swiftly carried out. To ensure the rapid advancement of supply tasks, we will formalize review meetings on a weekly basis for the time being and support the promotion of housing supply from a financial perspective."
* This article has been translated by AI.
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