4 block housing renewal sites, 3 small-scale reconstruction sites selected
Annual rate of 2.2%; up to 2 billion won per zone
The Seoul Metropolitan Government has selected seven sites as the first recipients nationwide of its "Moa Housing early project cost loan support" program, committing a total of 8 billion won ($5.98 million) in financing.
The loan program is a follow-up to the "Moa Housing and Moa Town revitalization plan" the city announced last year. Drawing on Seoul's housing promotion fund, the city will provide low-interest loans to cover design and consulting fees immediately after a cooperative is established, with the aim of heading off project delays caused by early cash shortfalls.
Block housing renewal projects had previously been able to access early-stage financing through the Korea Housing and Urban Guarantee Corporation (HUG), but the city created its own lending scheme to meet the surge in funding demand driven by the expansion of project zones. The new support is also expected to substantially ease the financial strain on small-scale reconstruction projects, which had long struggled to secure design and consulting fees right after cooperative formation due to the absence of any dedicated early-stage funding mechanism.
The seven selected zones comprise four block housing renewal projects and three small-scale reconstruction projects. Loan amounts are capped at 2 billion won per zone and may not exceed 5 percent of total project costs. Loans carry an annual interest rate of 2.2 percent, a three-year term, and a bullet repayment structure — principal and interest due in full at maturity.
If a zone has not yet received approval for its project implementation plan, the loan term may be extended in one-year increments with city approval, up to a maximum of seven years from the initial disbursement date.
Collateral will take the form of a HUG loan guarantee. Selected cooperatives may apply for loans through Seoul Housing & Communities Corp. (SH) after completing the necessary steps, including obtaining a HUG guarantee. Disbursements are set to begin on a rolling basis this month.
The city said the loans are intended to ease the burden of early-stage fundraising for cooperatives and help Moa Housing renewal projects advance to ground-breaking as quickly as possible.
Myeong No-jun, head of the Seoul Metropolitan Government's housing bureau, said securing funds at the outset is "the first gateway that determines the pace of Moa Housing renewal projects." He added that the city would continue to strengthen support so that the loans "relieve cooperatives' financial burden and help Moa Housing renewal projects move swiftly toward ground-breaking."
Meanwhile, the city plans to break ground on 40,000 Moa Housing units by 2031.
lucky@heraldcorp.com
