Ministry of Land, Initial Funding Loans for Reconstruction and Redevelopment Commences… Up to 5 Billion Won Support After the Project Implementation Plan Approval
The Ministry of Land, Infrastructure and Transport has officially begun to implement a policy that provides up to 5 billion won in loans for initial funding support for reconstruction and redevelopment associations.
This measure is an extension of the 'Housing Supply Expansion Plan', based on the content announced in August 2024, and aims to allocate a new budget of 40 billion won this year.
Details of Initial Funding Loan Support
This initial funding loan is a system that supports maintenance project associations in securing necessary funds while preparing for the project implementation plan approval. It operates under the "Urban and Residential Environment Maintenance Act" and has been established to facilitate the smooth advancement of maintenance projects.
Let's learn about the loan support conditions and limits.
The target of support is maintenance project associations for reconstruction and redevelopment, which are preparing for project implementation plan approval. The support amount is determined based on the construction area of the project site, with up to 5 billion won available.
Funds can be used for various purposes. This includes costs for preparing the business plan, association operating expenses, and repayment of existing loans, among others.
The interest rate varies depending on the region and type of project, and full repayment can be made within one year after project implementation plan approval. It should also be noted that it can be extended for up to 5 years if necessary.
| Category | Seoul (Excluding Adjustment Areas) | Areas Outside Seoul |
| Reconstruction | 3.0% per year | 2.6% per year |
| Redevelopment | 2.6% per year | 2.2% per year |
Associations applying for loans will undergo an evaluation based on the public interest and stability of the project. Projects with a high rate of resident agreement will receive priority support. A guarantee fee may be incurred separately, up to a maximum of 1%.
Resident Explanation Meetings to Be Held
The Ministry of Land, Infrastructure and Transport is set to hold 'Resident Explanation Meetings' by region starting March 11, 2025, to convey major changes in maintenance projects.
Detailed information about the policies will be provided at these meetings.
| Category | Date | Location |
| 1st (Seoul Area) | March 11 (Tuesday) | Korea Financial Investment Association |
| 2nd (Gyeonggi Area) | March 13 (Thursday) | Suwon Convention Center |
| 3rd (Gyeongsang Area) | March 25 (Tuesday) | Korea Real Estate Agency (Daegu Headquarters) |
| 4th (Jeolla Area) | March 26 (Wednesday) | Kim Dae-jung Convention Center (Gwangju) |
| 5th (Chungcheong Area) | March 27 (Thursday) | Korea Railroad Corporation (Daejeon Headquarters) |
At these meetings, several improvements aimed at simplifying maintenance project procedures and accelerating project progress will be introduced.
Key elements include adjusting the timing of safety inspections, permitting the early formation of promotion committees, and introducing online general meetings and electronic signature consent. These changes are expected to contribute to increased project efficiency.
Ministry of Land, Expecting to Solve Initial Funding Challenges for Projects
The head of the Housing Maintenance Department of the Ministry of Land, Infrastructure and Transport hopes that this support will be actively utilized to assist maintenance project associations in securing initial funding and reducing financial costs. He added that he will continue to seek necessary support measures by collecting various opinions from the field through resident explanations.
This support is expected to alleviate the financial burden of maintenance project associations and accelerate project advancement, given that the government is actively engaging in expanding housing supply, it seems that reconstruction and redevelopment projects will proceed smoothly. This trend is anticipated to have a positive impact on the stabilization of the housing market.
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