Welfare services at a glance

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Financing Program to Improve Housing in Farming Villages

In response to the demand for upgrading old and/or poor houses and building new houses in farming and fishing villages, this policy promotes residential welfare and revitalizes farming and fishing villages by improving their residential environment.
Who is eligible?
  • Targets
    • Eligible recipient: Anyone who falls under any of the following three criteria and is the owner of the house to be renovated/newly built
      • 1) A householder who wishes to renovate an old/deteriorated house that he/she owns in a fishing/farming village (including quasi-farming and fishing villages, hereafter referred to as “rural areas”)
        - However, in the case of the construction of a new house through this program, the existing house must be demolished before the date of the loan, and the building register and a certified copy of the building registration must be expunged. A resident of an unapproved residential house or illegal building must provide a photo or some other kind of evidence to prove that he/she has demolished the existing building.
        - Cannot apply for the program if all members of the household own a house other than the one they wish to renovate
      • 2) The head of a household living in a rural area who does not own a house (nor do any members of the household)
      • 3) For a head of a household who wishes to move from the city to a rural area, he/she must be able to submit documents to prove that he/she has disposed of the house in the city before applying for a housing loan and file a move-in report to the rural area, in accordance with the Resident Registration Act, before the date of acquisition.*
        * Date of acquisition: Date on which the house is acquired, in accordance with Article 20, Paragraph 6, of the Enforcement Decree of the Local Tax Act
        ** If the house in the city is not disposed of before the date the loan is applied, the applicant shall not be considered an eligible recipient.
        - An eligible recipient cannot apply for the program if he/she is living in the city and owns two (2) and more houses (including those owned by household members).
        ※ In the case of residents (and potential residents) who live in areas developed under New Town Development Business under the Agricultural and Fishing Villages Improvement Act, criteria 1 to 3 above shall apply as of 2020 (the year when government subsidies are provided), starting with New Town areas.
        - If an applicant who meets all of the criteria had already undertaken a construction project before applying for the program,* he/she cannot apply for this program. The application for the program must be submitted before filing the building report. However, if the construction project is already underway in 2019, the applicant can apply for the program before the project is completed * These refer to cases wherein the applicant has already filed the building report (and received approval) or engaged in construction without filing the building report or receiving approval for the building.
  • Selection Criteria
    • Recipients shall be selected based on the program’s selection priorities,* and the municipal/provincial governments shall notify the Ministry of Agriculture, Food and Rural Affairs of the recipients selected for the program.
      * Selection priority: Those who upgraded to slate roofs; those who voluntarily demolished empty houses; vulnerable families, such as families with young children and multicultural families; residents of rural areas who renovated old or deteriorated houses or do not have any house to live in; builders of residential houses in new/rural village development project zones; and those who need separate assistance
What benefits are offered?
  • Benefits
    • 1. Mortgage loans
      - Mortgage loans are provided based on National Agricultural Cooperative Federation’s (Nonghyup) loan evaluation within and only up to the amount needed to build a house. The building renovated or newly constructed through the Housing Improvement Program and the land on which it stands are to be taken as collateral.
      - The loan limit* shall be determined according to the results of the loan evaluation (credit and collateral evaluation) undertaken by the lender (Nonghyup) in accordance with its loan regulations. The loan limit shall be within the amount written in the project performance confirmation form verified by the local government.
      * Up to KRW 2 million can be taken out for new construction, reconstruction or major repairs and up to KRW 1 million for expansion and renovation.
      - (Interest rate) Can choose from fixed rate of 2% per year or a variable rate
      - (Repayment options) Choose from 19-year installment payment with a grace period of one (1) year or 17-year installment payment with a grace period of three (3) years
    • 2. Loan for down payment (including intermediate payment)
      - Up to KRW 30 million for new construction, reconstruction or major repairs and up to KRW 15 million for expansion and renovation, in accordance with Nonghyup’s loan regulations. The loan for down payment is given when the applicant submits a construction certificate or an official document proving that he/she has been selected for the government support program. The loan for intermediate payment is given when the applicant submits a project performance confirmation form within the amount guaranteed by the collateral of the project (such as land).
    • 3.Fees for land purchase
      - Financial assistance of under KRW 70 million for land purchase,* in accordance with Nonghyup’s regulations on loans, if an applicant without a house purchases a plot of land under 660m2 on which to build a house. Collateral is required.
      * Land purchase fees are not included in the project performance evaluation that the applicant needs to submit when taking out a loan after the house construction is completed.
      - To prove that the applicant does not own a house, he/she is required to submit Form 7 (Non-Owner Confirmation Memorandum) along with his/her resident registration, certified copy of register for the land purchased and certificate of property tax payment.
    • 4.Tax and fee exemptions
      (1) (Tax exemptions) In accordance with Article 16 of the Restriction of Special Local Taxation Act, acquisition tax shall be exempted until December 31, 2021 for a house with an area for the exclusive use of its occupants, not exceeding 150m2, acquired by a person who resides in the relevant Special Self-Governing City, Special Self-Governing Province, or si, gun or gu subject to housing improvement.
      - If the total amount subject to acquisition tax is under KRW 2.8 million, acquisition tax is exempted
      - If the total amount subject to acquisition tax is over KRW 2.8 million, acquisition tax on KRW 2.8 million is exempted
      * If any of the subparagraphs of Article 16, Paragraph 2 of the Restriction of Special Local Taxation Act applies to the applicant, he/she must pay a penalty for the exempted taxes.
      * Applicants of the 2018 program will be subject to the revised Restriction of Special Local Taxation Act (acquisition taxes exempted and property taxes levied).
    • (2) (Fees for cadastral survey) In accordance with Article 23, Paragraph 1, Subparagraph 2, of the Regulations on Standard for Calculating Cadastral Survey Fees and etc., the cadastral survey fees shall be reduced by 30% if the applicant has been selected as a recipient of the Financing to Improve Housing in Farming Villages.
      - Can apply to the personnel in charge of cadastral survey customer service at local governments (need to submit a document issued by the government notifying that the applicant has been selected as a recipient of the Financing to Improve Housing in Farming Villages)
      - Fee deductions are to be effective as of the date the applicant is selected as a recipient. Deductions cannot be applied retrospectively for surveys taken before the selection date.
How can I apply?
  • Application
    • Application is as follows.
    • 1 Application is as follows.

      Visit city, country, or district office, receive the confirmation and submit to Nonghyup.

    • 2 Selection of Eligible Candidates
      and Notification of Final Selection

      Application for the service is filed to city, county, or district office, and the eligible candidate is notified of the final selection.

    • 3 House Upgrading

      The applicant upgrades his or her house.

    • 4 Issuance of House Use Approval

      City, county, or district office issues approval for using the house.

    • 5 Application for a Loan

      Apply to Nonghyup for a loan.

    • 6 Delivery of a Loan

      A loan is delivered by Nonghyup.

The above mentioned welfare services are as of 2019. (Ministry of Agriculture, Food and Rural Affairs, Regional Development Division)

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