Controversy arises over income thresholds in government home loans

[Photo by MK DB]

Government-backed Didimdol and Beotimmok loans, which offer low-interest housing purchase and rental funds, have sparked controversy due to their income thresholds. The thresholds for multi-child families are lower than those for newlywed couples, causing dissatisfaction among families already raising multiple children.

Didimdol loans provide low-interest funds for home purchases through the Housing and Urban Fund, targeting low-income citizens without their own homes. Beotimmok loans similarly offer low-interest loans for rental deposits. Both loans are popular among low-income families due to their interest rates starting as low as 1 percent.

These loans are not available to everyone due to income restrictions. For first-time homebuyers and families with two or more children, the combined annual income of the couple must not exceed 70 million won ($50,000). For newlywed couples, the limit is set at 85 million won. Previously, newlyweds also had a cap of 70 million won, but the government raised the limit in October last year to reduce their housing cost burden. Similarly, for Beotimmok loans, multi-child and two-child families must have an annual income below 60 million won, whereas newlywed couples can earn up to 75 million won.

[Graphics by Song Ji-yoon and Minu Kim]

Since the interest rates for Didimdol and Beotimmok loans are over 1 percent lower than those of commercial banks (3-4 percent), many prefer these government loan products.

Families with multiple children, who face significant living expenses for childcare and education, feel this policy is unfair. A Seoul resident named Park criticized the government, saying, “Raising two kids requires both parents to work, but the government denies us loan benefits just because we exceed the income threshold.”

The government’s recent policy to increase housing contract opportunities for families with newborns has further fueled the dissatisfaction among multi-child families. These families, who already have two or three children, feel left out. A mother of three in Seoul, surnamed Yang, expressed concern, saying, “Current low birthrate policies are focused solely on those planning to have children in the future, causing resentment among families who do not benefit.”