LH holds financing briefing for private-sector public housing projects

Korea Land and Housing Corporation held the "LH Private-Sector Participation Project Financing Support Briefing" at its Southern Gyeonggi Province regional headquarters on Tuesday.

Organized jointly with Korea Housing and Urban Guarantee Corporation (HUG), the briefing aimed to expand private construction companies' participation in public housing projects and revive the sluggish private construction sector. Attendees received guidance on newly developed financial support product structures and operational plans.

LH has conducted multiple working-level consultations with HUG and related agencies, and has continuously monitored financial markets to implement the government's housing supply expansion measures — known as the Sept. 7 package. As a result, it has established a tailored financial support framework optimized for public housing projects.

The briefing was held under the theme "A Paradigm Shift for the Rapid Supply of Public Housing," and proceeded in three parts: a presentation by LH on the overview of private-sector participation projects and the progress of financial support initiatives; guidance from HUG on the financial support product structure and operations; and a question-and-answer session with attendees.

LH and HUG jointly introduced a customized financial support product optimized for private-sector participation projects. The product targets public pre-sale districts under contract-type private-sector participation projects using a direct settlement method, and applies not only to newly announced districts but also to already-underway districts where private operators have advanced funds due to shortfalls in pre-sale revenue — amounts LH has yet to pay as outstanding construction progress payments.

The guarantee limit covers up to 80 percent of total project costs for standard public pre-sale projects, and up to 90 percent for newlywed hope towns and districts delayed by pre-subscription periods of six months or more. The loan interest rate is expected to be in line with HUG-backed project financing loan rates, and a flat annual guarantee fee rate of 0.324 percent will apply.

"We have worked hard to develop a financial support model that provides real, practical help to private construction companies participating in private-sector participation projects, and it is meaningful to be able to share it through this briefing," said Oh Ju-heon, head of LH's public housing division. "We will continue to do our utmost to drive the recovery of the construction sector through mutual cooperation with the private sector, and to swiftly supply high-quality public housing that the public can trust."

Following the briefing, LH and HUG signed a "Financial Guarantee Implementation Agreement for Expanding the Supply of Private-Sector Participation Public Housing Projects." The two agencies plan to further strengthen their cooperative framework and move into full-scale operation of the financial support system.

Meanwhile, LH plans to overhaul the funding support structure and operational procedures for its new-build purchase agreement program, raising the land acquisition support fund — provided to private operators when purchasing land — to up to 80 percent of land costs, and paying construction fees in installments every three months in line with construction progress.