The article discusses the South Korean government’s decision to announce new regulations for the Didimdol Loan, primarily targeting the metropolitan area while excluding non-metropolitan areas, after previously deferring these regulations due to public backlash. The Ministry of Land, Infrastructure, and Transport plans to announce tailored improvements on October 23, focusing on reducing the loan limits but maintaining the overall direction of the policy. Regulations will exclude non-metropolitan areas due to differing housing market conditions. Current application submissions will not be affected, and an appropriate grace period will be provided to minimize consumer inconvenience.
The proposed regulations are expected to address excessive loan practices that deviate from the intended purpose of Loan-to-Value (LTV) ratios, such as waiving priority repayment deductions for tenants and restricting future collateral loans that negatively impact the Housing and Urban Fund’s soundness. Tenant priority repayment waivers involve providing loans that cover priority repayment amounts for small tenants. Future collateral loans refer to loans for newly constructed apartments not yet registered.
Earlier, banks notified customers of new measures starting from October 21, which included restrictions on financial guarantees, tenant repayment deductions (priority deduction), and future collateral loans. However, real demand homebuyers, who had expected larger loans under the previous criteria, protested the reduction in loan size, leading to a deferral of the Didimdol Loan limit reductions. A ministry official emphasized the management of policy loans for housing market stability and household debt control, highlighting the importance of supporting genuine demand within the constraints of the Housing and Urban Fund while discouraging excessive lending practices.