1.6-3.3% loan of 500 million won when purchasing a house for pregnant households... extraordinary support!

Korea, which is deeply troubled by low birth rates, has announced an unconventional policy to support housing stability for households with pregnant women! This policy was included in the ‘2024 Budget’ announced by the Korean government on August 29. Let’s look at information that also applies to multicultural families. Pay attention!

How do we support housing stability?

*A whopping 500 million won loan when purchasing a home: The Ministry of Land, Infrastructure and Transport has decided to provide loans for home purchase and lease at the lowest interest rate to households with childbirth, regardless of marital status, starting next year. First, we decided to provide a loan of up to 500 million won through the ‘Newborn Special Loan’ if a family with a baby purchases a house worth less than 900 million won. Households with an annual income of less than 130 million won can use special loans, and the loan limit is a whopping 500 million won!

*The interest rate is also great! Additional discount if you have more children! : The special interest rate varies depending on income, and a very low interest rate of 1.6-3.3% is applied for 5 years. If you have more children after receiving a special loan, the loan interest rate is reduced by 0.2% points per child and the special interest rate application period is extended by 5 years. The target group is non-homeowners who gave birth within two years of the date of loan application, and the special interest rate applies to children born this year.

*How do we support for lease funds? : Special rental deposit loans for newborns can also be used by households with an income of 130 million won or less.

This applies to houses with a deposit of less than 500 million won in the metropolitan area and 400 million won in regional areas, and the loan limit is 300 million won. Depending on income, a special interest rate of 1.1-3.0% is applied for 4 years. The special loan for newborns is scheduled to be released around January next year.

What should we do with the house where the birthing family will live?

*Special supply of pre-sale housing: The Ministry of Land, Infrastructure and Transport has decided to provide public and private pre-sale housing up to 70,000 units per year to households with new mothers. In particular, in the case of public housing, we plan to provide housing upon childbirth, regardless of marital status.

First, we decided to establish a special supply for newborns in the public housing ‘New Home’ and supply about 30,000 units per year. This means that winning an apartment becomes easier. To qualify for special supply support, average monthly income must be less than 150% (9.76 million won for a three-person household) and assets must be less than 379 million won.

*Prioritized supply of rental housing: We have decided to provide public rental housing first even if a pregnant family wants to rent rather than purchase a home. One thing to be clear is that this policy does not mean that the government will provide housing on its own when a child is born, but rather that if the child-bearing family finds the house they want and applies to LH Corporation, it will be provided first, whether for sale or lease. If you don't apply, nothing happens~

So how do we do it?

*Multicultural family birth household simulation: Let’s assume that the policy announced this time is applied to a multicultural family birth household that gave birth to a child this year. If a multicultural family in Gyeonggi-do who gave birth to one child this year applies for a new home, a public housing unit to be built in Goyang-si, Gyeonggi-do in February next year, they can apply for the ‘Newborn Special Supply’. However, there are many special supply methods, such as newlyweds, first-timers, multiple children, etc., so I need to carefully review which one has less competition and is more advantageous for me before applying.

* Unconventional policy, OK for multicultural families: Fortunately, they won through the 'special supply for newborns' and if the multicultural family's annual income is less than 30 million won, they can borrow 80-90% of the apartment sale price of 500 million won at an interest rate of 1.6% and move in.

Additionally, if you have one more child next year, the interest rate will drop to 1.4%, lowering your interest burden. This policy to support housing stability for families with children is expected to be very useful for multicultural families in Korea, where real estate plays a major role in increasing assets.^^

Mary Eve of Papaya Story