Redevelopment & Reconstruction Relocation & Moving Cost Loan

Redevelopment & Reconstruction Relocation and Moving Cost Loan

When a Korean redevelopment (재개발) or reconstruction (재건축) project reaches demolition and construction, member households must vacate their homes and move to temporary housing. Three separate programs help cover the cash needed to relocate. This calculator estimates the relocation loan limit and interest burden, the statutory moving cost, and the residential relocation allowance that applies to redevelopment, so you can see how much cash you actually receive at the moment of moving out.

Note: This English page explains a Korea-specific estimate based on 2026 rules (the Financial Services Commission’s 2025-10-15 lending measures, the Act on Acquisition of and Compensation for Land, and the Act on the Improvement of Urban Areas and Residential Environments). It does not replace lender approval, an association’s management & disposal plan, an official appraisal, or legal advice.

The three relocation funds

1. Relocation loan (이주비 대출)

The relocation loan is a group loan secured by the appraised value of the member’s prior asset, guaranteed by the association and the construction company. It is typically 40–60% of the appraised value (approximate right value), used from move-out until move-in (about 2–4 years), and repaid in a lump sum at move-in.

• Interest-free portion: the association / construction company bears the interest.
• Interest-bearing portion: the member pays interest, often settled against the contribution or at final settlement.
• Regulated-area cap: under the 2025-10-15 measures, relocation loans keep a maximum of KRW 600 million and are not reduced by the price-tiered caps (KRW 400M above 1.5B, KRW 200M above 2.5B).
• No DSR: interim and relocation loans are excluded from the Debt Service Ratio and the stress-rate add-on.

2. Moving cost (이사비, statutory table 4)

For redevelopment (a public-interest project), the association pays the moving cost under Article 55 and Annex Table 4 of the Enforcement Rule of the Land Compensation Act. The moving cost equals labor + vehicle transport + packing, where packing is 15% of (labor + transport). Labor uses the Statistics-Korea common construction laborer wage (published semi-annually), and transport uses the 5-ton truck 8-hour daily rate published by the Korea Transport Institute (annually).

Exclusive area	Labor	5-ton trucks
Under 33㎡	3	1
33–49.5㎡	4	2
49.5–66㎡	5	2.5
66–99㎡	6	3
99㎡ or more	8	4

The Supreme Court has held that even cash-settlement members (who did not apply for a new unit) must receive the moving cost and relocation allowance (Supreme Court 2011Du19031, decided 2013-01-10). Reconstruction, by contrast, proceeds via a civil sale demand and has no statutory moving-cost duty, so the association pays a fixed amount set in its management & disposal plan.

3. Residential relocation allowance (주거이전비, redevelopment only)

The residential relocation allowance is paid to residents displaced by a public-interest project. It applies to redevelopment but not to reconstruction. Owners (members) receive 2 months, and tenants receive 4 months, of the monthly average household expenditure of urban wage-earner households (Statistics Korea Household Trend Survey, urban, nominal).

• Eligibility date: the public-notice date of the redevelopment-zone designation.
• Amount date: the statistics published just before the project-implementation authorization date.
• Tenant requirement: residence of 3+ months as of the public-notice date (Supreme Court 2011Du3685, decided 2011-07-14).
• 6+ person households: five-plus amount + extra persons × ((five-plus amount − two-person amount) ÷ 3).

Redevelopment vs. reconstruction

Item	Redevelopment (expropriation)	Reconstruction (sale demand)
Relocation loan	Yes (appraised value × LTV, KRW 600M cap)	Yes (home-secured, KRW 600M cap)
Moving cost	Statutory Table 4	Fixed association amount
Relocation allowance	Owner 2 mo / tenant 4 mo	None

Redevelopment is a public-interest project, so Article 65 of the Urban Improvement Act applies the Land Compensation Act to pay the moving cost and relocation allowance. Reconstruction runs as a civil sale demand among members, so relocation support is set by the association’s articles and management & disposal plan instead of statutory compensation.

How to use

Step 1 — Project type and area

Choose redevelopment or reconstruction, and mark whether the property is in a regulated area. A regulated area applies the KRW 600 million relocation-loan cap.

Step 2 — Loan conditions

Enter the appraised value, LTV, interest-free portion, interest-bearing rate, relocation period, and existing mortgage balance. The tool splits the interest-free and interest-bearing portions and shows the net cash received after repaying the existing loan.

Step 3 — Moving cost

Enter the exclusive area; the Table 4 bracket sets the labor and truck counts automatically. For reconstruction, enter the fixed association amount and compare it with the Table 4 reference.

Step 4 — Allowance and net cash

For redevelopment, choose owner or tenant, the household size, and expenditure figures to compute the allowance. The summary card shows total cash at move-out and the net cash after the interest-bearing interest.

Worked example

With an appraised value of KRW 800 million and a 60% LTV, the loan limit is KRW 480 million. If the interest-free portion is 40% (KRW 320 million), the interest-bearing portion is KRW 160 million; at a 5% annual rate for 30 months the interest is about KRW 20 million. Adding a Table 4 moving cost of about KRW 1.84 million for an 84㎡ unit (6 laborers × 166,000 + 3 trucks × 200,000, plus 15% packing) and the owner allowance for a 3-person household gives the cash available at move-out.

FAQ

Q. Is the relocation loan subject to DSR?

No. Interim and relocation loans are excluded from the Debt Service Ratio and the stress-rate add-on under the 2025-10-15 measures, though a regulated area caps the relocation loan at KRW 600 million.

Q. How do interest-free and interest-bearing portions differ?

The interest-free portion is covered by the association and construction company; the interest-bearing portion is paid by the member and is usually added to the contribution or reconciled at final settlement.

Q. Does the moving cost match a real moving quote?

Not exactly. Table 4 is a standardized statutory compensation based on labor, transport, and packing, which can differ from an actual packing-move quote.

Q. Can a reconstruction member get the relocation allowance?

Generally no. The allowance applies to public-interest (expropriation) projects, not to the civil sale-demand process of reconstruction.

Estimate your move-out cash now

Enter the appraised value, LTV, exclusive area, and household size to see the relocation loan, moving cost, and relocation allowance together.

Results are 2026 estimates; actual limits, rates, and compensation depend on association, builder, and lender agreements and the management & disposal plan.

Real estate scenario inputs

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