Seoul is set to provide a total of 5.3 billion won in ‘redevelopment loan funds’ to redevelopment project committees and associations facing funding difficulties due to the sluggish construction market.
This support is a rerun of funds, part of the 24 billion won initially decided for the first half of this year, which were not executed due to withdrawal or rejection.
In the first half of this year, 43 zones applied for 68 billion won, and after evaluation, 24 billion won (about 100 million to 800 million won per zone) was confirmed for 42 zones. The redevelopment project, a major policy for improving outdated housing and residential environments, has been supported by Seoul with loan provisions since 2008. The cumulative support amount is expected to reach 330 billion won by July 2025.
The loan funds provided by Seoul can be used as project expenses, such as service fees and general meeting costs, and operational expenses required for the redevelopment project’s initial phases. This allows for stable procurement of necessary funding for redevelopment and reconstruction projects.
Eligible entities include housing redevelopment and urban redevelopment associations and committees. Applicants must meet requirements such as capital resolution at general meetings. The loan limits are up to 7.5 billion won per zone, with committee limits of 1.5 billion won and association limits of 6 billion won. The interest rates are lower than the market rates, with unsecured loans at an annual rate of 4.0% and secured loans at 2.5%.
The loan conditions include a five-year maturity with bullet repayment. Committees can extend annually until before selecting construction contractors, and associations can extend until before the completion approval application. Applications are open from September 4 to 26, and applicants must submit the application form and required documents to the redevelopment department of the respective district.
Seoul will review the progress and execution plans in October to select the support targets and finalize the support amount. The loan funds will be executed through Housing and Urban Guarantee Corporation (HUG) from October.
Along with loan support, Seoul is also assisting in shortening project durations and reducing costs by easing redevelopment regulations and simplifying administrative procedures. Choi Jin-seok, director of the Seoul Housing Office, said, “The loan support will be a substantial aid for redevelopment zones facing delays or suspension due to capital difficulties,” and added, “We will continue to strengthen public support to revitalize redevelopment projects.”