The Financial Services Commission (FSC) is expected to announce measures to expand housing supply and regulate jeonse loans for non-resident single-homeowners in the near future. A key task in this process is establishing criteria to distinguish between actual end-users and speculative demand. There are growing predictions that the exception grounds recognized in the recent tax revision plan (job transfer, illness requiring treatment and convalescence for one year or longer, school transfer due to school violence, caring for parents, etc.) will likely be applied as exceptions to the jeonse loan regulations as well.

In line with the supply promotion stance emphasized by President Lee Jae-myung, the FSC is reviewing various measures to revitalize supplier financing by reflecting suggestions from the construction industry and field officials. According to the financial sector on the 9th, the authorities are discussing measures such as expanding public guarantees for real estate project financing (PF) and easing loan regulations, as well as easing loan regulations for housing sales and rental businesses.

Expansion of PF Public Guarantees is the Top Priority The most widely discussed measure is a significant expansion of PF public guarantees. With the financial sector's conservative lending stance continuing, the intention is to supply funds to major project sites experiencing liquidity shortages by increasing the guarantee scale of public institutions such as the Korea Housing Finance Corporation (HF). Another major issue is whether to grant a grace period or ease the soundness regulation, which calls for a phased increase in the self-capital ratio of PF project sites to 20% over four years starting next year. There is also interest in whether the industry's demand to recognize private rental housing as social overhead capital (SOC) to grant regulatory grace periods or exceptions will be reflected.

Easing Loan Regulations for Housing Sales and Rental Businesses Under Discussion Easing loan regulations for housing sales and rental businesses is also under review. This could include expanding the scope of loan exceptions when supplying new housing for rental purposes, resolving disruptions in balance loans for complexes scheduled for occupancy, and expanding loan limits by applying the LTV criteria for relocation loans to new housing instead of existing housing.

Jeonse Loan Regulations: Exception Application is Key As for methods to restrict jeonse loans, reducing or limiting the guarantee ratios of public guarantee institutions such as HF, HUG, and SGI Seoul Guarantee is being strongly considered. A senior financial authorities official stated that they are carefully establishing criteria to block speculative purposes while ensuring that actual end-users who relocated due to unavoidable circumstances do not suffer.

Following the announcement of the tax revision plan, concerns about potential instability in the jeonse market and backlash from non-resident single-homeowners are adding pressure on the authorities. Accordingly, the FSC is focusing on final coordination regarding the intensity of regulations and the scope of exception applications. President Lee Jae-myung recently presided over two real estate policy review meetings, leading discussions over a total of 13 and a half hours, and emphasized the need to break away from existing practices and ways of thinking and make proactive and bold decisions.