Gyeonggi Province calls for 'jeonse' fraud aid to cover foreign victims

As a wave of scams exploiting Korea’s unique “jeonse” rental system has left tens of thousands of tenants at risk, Gyeonggi Provincial Government is urging the central government to extend state assistance to foreign residents who are living in Korea legally, according to officials Monday.

Under the jeonse system, tenants pay a large lump-sum deposit to their landlord instead of monthly rent. For decades, it was a relatively low-risk way to secure a home, while giving landlords access to a large pool of capital.

But as the housing market became more volatile, it emerged as a major source of risk. When landlords fail to return deposits, whether due to fraud or sharp decline in property values, tenants can be left with losses running into hundreds of millions of won.

As of July 31, the Ministry of Land, Infrastructure and Transport had officially recognized 40,278 people as victims under the Special Act on Support for Jeonse Fraud Victims and Housing Stability. Foreign nationals accounted for 544 cases, or 1.4 percent of the total.

The special act does not bar foreign residents from being recognized as victims. But the problem comes afterward: even once they receive official recognition as victims, they are largely ineligible for the main benefits available to Korean nationals, including public rental housing and financial assistance backed by the Housing and Urban Fund.

Gyeonggi Province is now asking the government to close that gap. It has proposed allowing the Korea Land & Housing Corp. (LH) to buy properties involved in fraud cases involving foreign residents and convert them into emergency housing, enabling those affected to remain in their homes.

It has also called for expanding financial assistance to foreign residents, including access to low-interest jeonse loans and refinancing programs that allow borrowers to replace their existing jeonse loans with more affordable options.

“Based on what we have confirmed, more than half of the 544 foreign nationals officially recognized as jeonse fraud victims reside in Gyeonggi Province,” an official at the province’s housing policy division said.

Gyeonggi Province has the country’s largest foreign resident population, with more than 710,000 people living in the province in 2025, or 34.6 percent of the nation's total.

“These people are legal residents here, with jobs, families and established lives in Korea. Given that the Special Act on Support for Jeonse Fraud Victims was introduced as a temporary measure to ease housing insecurity among victims, we believe its core protections should also extend to foreign nationals who are currently excluded from housing and financial assistance because of their nationality,” the official added.

In response to the province’s proposal, the land ministry noted that expanding the main housing and financial benefits to foreigners would require careful consideration.

“Under the Housing and Urban Fund Act and the Special Act on Public Housing, financial assistance and public rental housing are currently limited to Korean nationals,” an official in charge of jeonse fraud victim support at the ministry said.

“Extending those benefits to foreign victims would need to be weighed carefully against the purpose of the relevant laws, as well as the possibility that similar demands for government assistance could grow among other foreign residents who are not victims of jeonse fraud."

The official then said foreigners facing eviction or other urgent housing needs can already receive emergency housing assistance for up to six years. They are also eligible for other measures, including special provisions for court auctions and property sales, such as priority purchase rights, as well as legal assistance.