The South Korea Financial Services Commission published a financial package that increases property project finance guarantees and funding from KRW 26.3 trillion to KRW 47.8 trillion plus additional funding, while maintaining tighter controls on speculative housing credit. Public PF guarantees will reach KRW 23 trillion in 2026 and KRW 33 trillion in 2027. A new KRW 3 trillion Korea Asset Management Corporation normalization fund, an expansion of bank and insurer syndicated loans to KRW 5 trillion, and an increase in financial-sector recovery funds to KRW 10 trillion will support stalled projects. The package also defers the introduction of PF equity-ratio requirements for residential projects from 2027 to 2029. Demand-side measures include expanded restrictions on rental deposit loan guarantees for certain nonresident single-home owners, lower guarantee ratios for single-home owners, revised debt service ratio income calculations and higher capital requirements for high-risk mortgages. Targeted support will include three housing finance products for young people, separate treatment of housing supply-related mortgages under lenders’ aggregate targets, broader recognition of young borrowers’ future income and revised policy mortgage eligibility for newlyweds. The commission will manage 2026 household debt growth at around 3%, up from the original 1.5% target, with the additional lending capacity directed toward housing supply, youth housing and other owner-occupier needs. Of the package’s 34 measures, 15 are scheduled for immediate implementation in August 2026, seven are due by year-end and 12 requiring legislation or budget measures are planned for 2027.

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