Korea Housing & Urban Guaranty Corporation (HUG) is expanding its "Ddeundeun Jeonse Housing" program, under which the state-run guarantor becomes the landlord directly. With demand surging because tenants face no risk of losing their deposits and rents run below market rates, the agency is widening the range of properties it buys and overhauling its screening system. HUG also plans to channel funds raised through its safe lease trust into public rental housing over the medium to long term, pointing to a larger role for the agency in the housing supply drive the government has been emphasizing.
HUG said on the 21st that the 12th round of applications for Ddeundeun Jeonse Housing will open in the last week of September. The offering covers 900 units, 100 more than the 800 projected earlier this year. The increase follows HUG's decision to raise its 2026 supply target to 3,600 units from 3,000 — double the 1,800 units supplied last year. HUG aims to lift supply to 5,000 units next year.
Under the program, HUG buys homes through auctions and other channels after repaying deposits to tenants on behalf of landlords, then leases the properties to non-homeowners. Converting homes tied to guarantee defaults into public rentals allows the agency to recover claims and support housing stability at the same time. Deposits are set at about 90% of surrounding market rates, and tenants can stay for up to eight years. Anyone who is the head of a household that does not own a home, or a member of such a household as of the announcement date, may apply, with no limits on income, assets or age. Because contracts are signed directly with a public agency, applicants pay no brokerage fees. From the first round in July 2024 through the 11th round, 4,050 units have been supplied.
Competition has continued to intensify. In the 11th round, 49,640 people applied for 300 units, an average ratio of 165 to 1. Although the number of units was less than half that of a regular round of 700 to 800 because it was a non-scheduled offering, the number of applicants set a record. In Seoul, 36,117 people applied for 118 units, a ratio of 306 to 1.
To expand supply, HUG has also broadened the types of properties it purchases. The scope, previously limited to low-rise multi-unit housing, officetels — studio units used as either a home or an office — and apartment complexes of fewer than 150 units, now includes complexes of 150 units or more. The move responds to demand that has shifted toward apartments since the wave of jeonse fraud. HUG is also diversifying its acquisition channels beyond auctions to include properties held by bankruptcy creditors and assets referred for public sale.
This month, the agency introduced automated artificial intelligence analysis into its purchase screening. The system extracts housing types and details of legal rights from property registration certificates to compile baseline data for preliminary reviews. In a pilot run, the time needed to prepare documents fell to 10 seconds per case from about two minutes and 30 seconds. By cutting repetitive paperwork, the system allows staff to focus on reviewing legal rights. HUG plans to extend the analysis to appraisal reports and auction property statements.
The agency is also pursuing an expansion of public rental housing through its safe lease trust. The plan is to manage a fund built from tenant deposits and private investment, and to use part of it to supply rental housing including Ddeundeun Jeonse units. HUG President Choi In-ho said that if the safe lease trust takes hold and gathers 100 trillion won, the agency could consider using 20 trillion won of that to buy homes and increase rental supply.
