Housing finance guarantee revives 2,700-unit apartment project in Gimpo

Financial authorities are pushing project financing and other funding support to boost housing supply. A 2,700-unit apartment construction project in the Greater Seoul area has been normalized through a project financing guarantee from the Korea Housing Finance Corporation. Authorities urged the financial sector to actively support funding to spread such success stories.

Lee Eok-won, chairman of the Financial Services Commission, visited the Pungmu transit-oriented urban development project site in Gimpo, Gyeonggi Province, on Thursday and presided over a meeting on the Gimpo project financing site. Attendees included Hoban Construction, the project operator, along with officials from Gimpo Urban Corporation, the Korea Housing Finance Corporation, KB Kookmin Bank and the Korea Federation of Banks.

The site is home to a 2,700-unit project for which the Korea Housing Finance Corporation recently provided a 600 billion won ($448 million) project financing guarantee. The project had struggled from 2022 to 2023 amid a real estate slowdown and rising construction costs, but it was normalized after receiving the guarantee and has now entered the pre-sale process.

Park Chul-hee, president of Hoban Construction, who attended the meeting, said, "Even amid uncertainty in the pre-sale market and construction industry, we were able to steadily advance the project as our funding conditions improved through the Korea Housing Finance Corporation's project financing guarantee and other support." He added, "Financial support is essential for advancing projects without setbacks and supplying housing quickly, so we ask for the financial sector's continued active cooperation."

Kim Kyung-hwan, president of the Korea Housing Finance Corporation, said, "Following the Aug. 13 measures, we immediately expanded our guarantee supply target from 6 trillion won to 9 trillion won." He added, "We will continue to steadily carry out tasks to promote housing supply, including creating new guarantee products to support redevelopment projects and rental business operators."

Lee praised the Pungmu transit-oriented urban development project as a success story and urged the financial sector to actively supply funding.

"This is a success story showing how financial support for project financing leads to actual housing supply," Lee said. "As this case shows, ensuring rapid housing supply requires the efforts and achievements of every party involved in a project financing deal to come together organically — the developer's active commitment to advancing the project, the contractor's steady construction progress, reliable funding from private financial institutions backed by the Korea Housing Finance Corporation's public project financing guarantee, and the government's continued monitoring and system improvements."

The Financial Services Commission held a meeting on Wednesday, presided over by Jeon Yo-seop, director general of the Financial Policy Bureau, to review progress on financial support measures for promoting housing supply, checking the status of 21 detailed supply-related tasks under the Aug. 13 financial measures.

Authorities have so far implemented 12 of the 21 supply-related tasks. They decided to suspend, for two years, the project financing equity capital ratio regulation for residential projects to promote housing supply. After gathering opinions from the financial and construction industries this month, they plan to announce detailed plans as early as September.