[Edaily Reporter Choi Jeong Hoon ] Young people who purchased a villa or officetel using the “Youth Future Home Loan” must first sell their existing non-apartment property if they wish to receive the first-time homebuyer loan-to-value (LTV) preferential rate when purchasing an apartment later. If they purchase an additional apartment while still owning a non-apartment property, they are ineligible for the first-time homebuyer benefits. Although the government describes this as a “stepping-stone loan” designed to expand housing options for young people, concerns have been raised that if property prices fall or the property fails to sell in a timely manner, it could actually become an obstacle to moving into an apartment.

According to the Financial Services Commission on the 14th, the “Youth Future Home Loan” is available to young people aged 39 or younger purchasing a non-apartment property valued at 400 million won or less. It will be launched in January of next year and provided on a temporary basis for two years at an annual volume of 3 trillion won. Married couples can apply if either spouse meets the youth eligibility criteria.

The Financial Services Commission is considering applying an interest rate of around 3% per annum—approximately 2 percentage points lower than the standard “Bogeumjari” loan based on current market rates. If a borrower takes out a 200 million won loan at 3% per annum with a 30-year term, the monthly principal and interest payment would be approximately 850,000 won. This is comparable to the average monthly rent of 800,000 won for non-apartment housing. However, the maximum loan limit and specific eligibility criteria—such as income, assets, and the debt-to-income (DTI) ratio—have not yet been finalized.

The key feature of this product is that even if a young person purchases a non-apartment property, they retain their “first-time homebuyer” LTV eligibility. When a young person purchases another home following marriage or the birth of a child, the first-time homebuyer LTV limits—70% in the Seoul Metropolitan Area and regulated regions, and 80% in other regions—will apply again.

However, to purchase a subsequent home, borrowers must regain their status as non-homeowners. Yoon Deok-gi, head of the Macroprudential Finance Team at the Financial Services Commission, stated, “To receive the first-time homebuyer benefits again, you must sell the non-apartment property purchased through the Youth Future Home Loan without exception,” adding, “Purchasing another home while retaining an existing one is inconsistent with the product’s purpose, which is designed for non-homeowners.”

Not all first-time homebuyer benefits other than the LTV—such as property acquisition tax reductions—will be maintained. Consultations with relevant ministries regarding the property acquisition tax are still pending. Under current regulations, individuals are considered non-homeowners for housing lottery eligibility if they own a single non-apartment unit with an exclusive floor area of 85 square meters or less and a publicly assessed value of 300 million won or less (or 500 million won or less in the Seoul Metropolitan Area).

The Financial Services Commission (FSC) has defined the “Youth Future Home Loan” not as a stimulus measure for the non-apartment market, but as a “niche product.” The intent is to provide an additional purchasing option for single-person households—such as those who have moved from the provinces to Seoul and are renting villas or officetels near transit hubs—and for young professionals just starting their careers.

Team Leader Yoon explained, “This is not about forcing young people to buy non-apartment housing or aiming for the product to be a huge hit,” adding, “We’ve created an additional option so that young people paying monthly rent who wish to own a home can take advantage of it.”

The government emphasizes that it has not scaled back support for young people looking to purchase existing apartments. Last year, out of the 19 trillion won in General Bogumjari Loans, 12 trillion won was utilized by young people aged 39 and under, and 11.6 trillion won—97% of the amount allocated to young people—was used to purchase apartments. The government explains that young people who want to buy apartments can continue to use existing programs such as the Stepping Stone Loan or the Bogumjari Loan. The government is also considering expanding the program’s eligibility to include apartments after operating the Future Home Loan for two years, depending on market response.

However, it is more difficult to assess market prices for non-apartment properties than for apartments, and since transactions are less frequent, selling them can take a long time. If prices fall, it becomes difficult to use the proceeds from the sale to pay off existing loans and secure funds for purchasing an apartment. The fact that preference for villas and officetels has significantly declined following jeonse fraud incidents is also a concern.

The Financial Services Commission also acknowledged these risks. Team Leader Yoon stated, “There may be concerns that falling prices or low liquidity of non-apartment properties could hinder young people,” but added, “This is not a measure that blocks support for apartment purchases; rather, it is a niche product designed to allow young people to make their own choices based on their needs.”

Ultimately, for the “Youth Future Home Loan” to serve as a stepping stone to homeownership, measures must be put in place not only to offer low interest rates but also to enhance the price reliability and transaction security of non-apartment properties. This is because if borrowers are unable to sell their non-apartment properties in a timely manner, the first-time homebuyer LTV benefit preserved by the government will be unlikely to lead to the actual purchase of an apartment.