International Conference of Korea Development Institute Residential Welfare and Housing Policies: The Experience and Future of Korea
Restructuring the Role of the National Housing Fund and Policy Recommendations
This paper analyzes various NHF loan programs and provides policy
recommendations to enhance their efficiency and legitimacy. First, analyses
on household loan programs revealed that a discrepancy exists between
target households (total income of households is lower than the 6th decile)
and actual beneficiaries. This is due to the fact that loan eligibility has been
determined not by total household income but rather by the income of the
head of the household. On the other hand, analyses on the financial status of
construction companies, which were approved for loans from the NHF,
show that the profitability of construction companies is not sound.
Based on the above evaluation and operational changes, the policy
recommendations are as follows: First, financial support for housing construction
should focus on the construction of rental housing units. Second, the NHF’s
financial support of households should target lower-income groups and accessibility
to NHF programs should be improved.
This paper also proposes detailed operational improvements based on the
analyses of existing NHF programs. First, loan eligibility should be modified to
warrant the original NHF mission. In the long run, eligibility should be based on the
total income and wealth of households. In the short run, eligibility should be based
on total household income. Second, NHF programs for the construction of middlesized rental units should be modified to enhance the efficiency and soundness of the
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