Main applicants cite heavier financial burden under tightened lending rules

Land Ministry agrees to apply original loan conditions from pre-application stage

SH says it is working out implementation details; move-in date also expected to slip

Godeok Gangil District 3 complex. [Provided by Seoul Metropolitan Government]
Godeok Gangil District 3 complex. [Provided by Seoul Metropolitan Government]

The pre-sale schedule for Godeok Gangil District 3, a land-lease housing complex widely known as a "half-price apartment" project, has been pushed back from August to October. The delay came after the Ministry of Land, Infrastructure and Transport moved belatedly to address complaints from main-application winners who said tightened loan regulations had made financing unmanageable, in some cases prompting them to walk away from their contracts. Officials said additional time was needed to put the necessary policy fixes in place, prolonging the wait for households without homes hoping to secure affordable public housing.

Seoul Housing & Communities Corporation announced Thursday that the main subscription schedule for the Godeok Gangil District 3 land-lease pre-sale had been postponed. "The land minister recently announced at a meeting that improvements would be made to address problems arising from loan applications for land-lease pre-sale housing," SH said. "A certain period of time is needed to apply those changes to Godeok Gangil District 3, which is why we are postponing the subscription."

Under SH's land-lease housing model, SH retains ownership of the land while buyers own only the building — a form of public pre-sale housing. Godeok Gangil District 3 had been scheduled to open main subscriptions this month for 215 units with an exclusive use area of 59 square meters, among other units. The timetable was disrupted, however, after residents of the previously sold Magok District 17 complex in Gangseo-gu began abandoning their move-in plans due to tightened lending conditions.

The problem stemmed from a gap between the loan conditions available at the pre-application stage and those in effect at the time of the main application. At Magok District 17, which held its pre-application in 2022, the building pre-sale price was 290 million to 340 million won ($246,000) for the 59-square-meter units and 400 million to 450 million won for the 84-square-meter units, with monthly land lease fees of 663,900 won and 946,000 won respectively.

When the government unveiled its 2022 New:Home sharing-type program, it offered a dedicated mortgage of up to 80 percent of the pre-sale price, capped at 500 million won. In July, the Ministry of Land, Infrastructure and Transport said it would honor the original conditions — a loan-to-value ratio of 80 percent with no debt service ratio requirement — for pre-application winners who had signed up under those earlier terms.

Main-application winners, however, found themselves subject to the revised lending rules: a loan-to-value ratio of 60 percent and a fire-insurance deduction of 55 million won, leaving them tens of millions of won worse off than pre-application holders. Some buyers, facing the prospect of forfeiting their contracts, staged protests and filed complaints with the ministry and SH. On Tuesday, the ministry agreed to their core demands — applying the original dedicated mortgage terms and waiving the fire-insurance deduction.

Under the ministry's remedial measures, all households that had completed the resident recruitment process will now receive the loan terms announced at the time of the 2022 policy launch: a maximum term of 40 years and a fixed interest rate of 1.9 to 3.0 percent. The additional steps required to implement those measures, however, have inevitably affected the supply schedule for Godeok Gangil District 3 and other land-lease housing projects.

With the pre-sale schedule pushed back, the originally planned March 2027 move-in date for Godeok Gangil District 3 is also expected to slip. "We needed the time required for winner selection and verification procedures, and that is what led us to postpone the schedule," an SH official said. "We apologize for delivering this sudden change to those who have waited so long for their subscription."


hope@heraldcorp.com