Do you have big dreams of owning your own property, a modern home, or an energy-efficient renovation? Then you should definitely consider the wide range of options offered by KfW promotional loans. The Kreditanstalt für Wiederaufbau (KfW) offers a wide range of promotional programs to support the purchase, construction, renovation, and modernization of residential property.
Home financing – made easier with subsidies, Kfw grants, and promotional loans
For many people, the dream of owning their own home is a key goal in life. Whether it involves building a new house or modernizing an existing building, the path to realizing this dream is often fraught with financial challenges. Building and modernizing a house requires solid financial planning to ensure that all costs are covered. It therefore makes sense to consider the options for financial support. KfW subsidies can enable significant savings.
How does KfW funding work?
The path to KfW funding leads through a bank that acts as an intermediary, known as the "house bank principle." The loan terms are set by KfW and therefore apply regardless of the bank you work with. Some banks offer the KfW home ownership program. It is important to note that not all banks handle all KfW programs, and insurance companies are generally not responsible for granting KfW loans. In some cases, however, KfW loans can be forwarded via state development institutions.
What changes and innovations are there in KfW subsidies for 2023?
- Increase in subsidy amounts: The maximum subsidy amount for various programs will be raised in 2023 to ensure even better support for investments.
- Adjustment of interest rates: The interest rates for some KfW subsidy programs will be adjusted to offer attractive financing options.
- Simplification of application procedures: The application process for KfW subsidies will be further simplified to facilitate access to funding.
- Focus on sustainability: KfW is placing greater emphasis on environmental and climate protection, with subsidies for sustainable projects receiving particular support.
KfW programs 2023: Financial support for construction, housing, and energy saving
Federal funding for efficient buildings (BEG)
- Who is eligible for funding? Anyone who wants to modernize their property.
- How much funding is available? Max. €120,000–€150,000
- What conditions must be met? Minimum energy efficiency level of 85, consultation with an energy efficiency expert required
- Special features: The conversion of rooms into living space may also be eligible for funding. Individual measures receive grants without loans
Increase the energy efficiency and comfort of your home with KfW funding as part of the Federal Funding Program for Efficient Buildings (BEG). Comprehensive modernization measures on your residential property can improve its energy performance while also increasing your living comfort. However, the Federal Funding Program for Efficient Buildings (BEG) focuses primarily on complete renovation. KfW funding through the Federal Office of Economics and Export Control (BAFA) offers support for the implementation of various measures such as insulation, replacement of the heating system, and installation of new windows.
The subsidy for a complete renovation to an energy-efficient house is extremely attractive. KfW supports all modernization measures that ensure that the building achieves at least energy standard 85. This standard is significantly higher than the requirements for new buildings and thus contributes to a sustainable future. You will receive a low-interest loan and a repayment subsidy that reduces your remaining debt at the end of the 10-year fixed interest period. The amount of the repayment subsidy varies depending on the level of efficiency achieved.
The subsidy loan covers 100% of the eligible costs, up to a maximum of €120,000 per residential unit in the building. If you have a heating system installed that is powered by at least 65% renewable energy, you can even increase the amount to up to €150,000. Depending on the level of efficiency, the repayment subsidy can be up to €37,500. Under certain circumstances, for example if your building is currently one of the least energy-efficient buildings, you can even receive an additional supplement.
It is important to note that the subsidy also covers the creation of new living space within a building, for example, the conversion of a previously unused attic. However, this option is only available if no new apartment is created. If, for example, you want to convert the attic into a self-contained apartment, you could receive funding through the KfW program "Climate-friendly new construction for residential buildings" (KFN), but without a repayment subsidy! It is also possible to combine new construction funding with modernization funding.
For those who do not want to completely renovate their property but would rather modernize it step by step, the Federal Office of Economics and Export Control (BAFA) offers funding for individual measures. In this case, you receive pure subsidies without having to take out a loan.
Loan for energy-efficient buildings (BEG 261)
- Who is eligible for funding? Anyone planning to completely renovate existing real estate or purchase renovated real estate.
- How much is the subsidy?€000 - €150,000
- What conditions must be met? The building permit for the building was issued at least 5 years ago and it is not an "unheated non-residential space" (barn, warehouse, etc.) that is to be converted into living space.
- Special features: Does not subsidize the installation of photovoltaic systems.
KfW does not only offer subsidies for the construction of real estate. The modernization and energy-efficient renovation of residential space are also generously subsidized. This subsidy program offers you the opportunity to renovate or modernize your property, or even to purchase a property that has already been renovated. But not just any renovation—this program focuses on energy-efficient measures that must comply with certain energy efficiency classes.
But what exactly is subsidized? The possibilities are endless! You can completely renovate your existing property or even purchase a property that has already been renovated.
The amount of funding depends on the desired energy efficiency standard. You can receive a low-interest loan of up to €120,000 or even €150,000. There is also an attractive repayment or investment subsidy of 15% to 50%, depending on the measure and energy efficiency standard.
KfW funding for climate-friendly new buildings (KFN 297, 298)
- Who is eligible for funding? Anyone planning to build a new energy-efficient house.
- How much is the subsidy? €100 ,000 - €150,000
- What conditions must be met? Construction of a Kfw-40 energy-efficient house or a Kfw-40 energy-efficient house with the "Sustainable Building (QNG)" quality seal
- Special features: The subsidy can be applied for individually for each residential unit in a multi-family house
The Federal Ministry of Construction recently published guidelines for the promotion of energy-efficient new buildings from March 2023. The "Promotion for Climate-Friendly New Buildings (KFN)" program is intended to support particularly energy-efficient buildings. A funding pot of €750 million is available, the exact scope of which is difficult to predict.
The funding will be administered by the Kreditanstalt für Wiederaufbau (KfW) and will take the form of low-interest loans only. Grants and repayment subsidies will no longer be awarded.
Specifically, the funding includes two options: Number 297 for the construction of a new Energy Efficiency House 40 with a maximum loan of €100,000 per residential unit, and number 298 for the construction of a new Energy Efficiency House 40 with the "Sustainable Building (QNG)" quality seal and a maximum loan of €150,000 per residential unit. In the case of multi-family houses, the subsidy is granted per apartment.
However, it is to be expected that the subsidy pot will be quickly exhausted. The exact number of subsidized houses or apartments that can be financed with the €750 million provided is difficult to estimate. It is expected that investors who are already in advanced stages of planning will be the first to access the subsidies in the short term.
KfW Home Ownership Program (KfW 124)
- Who is eligible for funding? All private individuals, regardless of income, age, or marital status, who are planning to build or purchase a property.
- How much is the subsidy? A lump sum of€50 ,000 as a loan
- What conditions must be met? The property must be used by the owner for 12 months.
- Special features: Shortfixed interest rate and high repayment rates
Whether you are buying or building a new home, this promotional loan is specifically designed for the purchase of owner-occupied residential property. Anyone who wants to realize their dream of owning their own home can benefit from this promotion. The KfW Home Ownership Program offers long-term, low-interest loans that can be applied for through participating banks or savings banks.
The program covers the construction or purchase of owner-occupied residential property, whether it is a single-family home or a property that is made available to relatives free of charge. Please note that debt restructuring of existing loans and refinancing of projects that have already been started or completed are excluded from the subsidy. Certain conditions apply to renting, such as a minimum usage period of 12 months before the property can be rented out.
The KfW home ownership program offers you a lump-sum loan with a term of up to 25 years and up to €50,000 per construction/purchase project, regardless of the actual total costs. The option of being repayment-free in the first year is particularly attractive. Depending on your individual needs, up to three repayment-free years can be agreed. The desired total term and the number of repayment-free years influence the amount of the repayment.
KfW subsidy program for home ownership for families (WEF, 300) – "Baukindergeld II" (child allowance for home buyers II)
- Who is eligible for funding? Low-income families with at least one minor child in the household
- How much is the subsidy? €140,000 - €240,000
- What conditions must be met? Construction of a KfW 40 new building with QNG-PLUS or QNG-PREMIUM certification
- Special features: Intended to replace the Baukindergeld child allowance and aimed at low-income earners
One particularly exciting subsidy program, which will start on June 1, 2023, is "Home Ownership for Families" (WEF). With this program, the federal government aims to support low- to middle-income families in building a new home for their own use. The subsidy loan is offered at an interest rate that is lower than regular bank interest rates.
It is even intended to be a kind of equity substitute. In this way, the federal government wants to replace the Baukindergeld (child allowance for home buyers) in a meaningful way and support families on their way to owning their own home.
There are also income limits to ensure that families with low to medium incomes can benefit from the subsidy. The taxable annual household income may not exceed €60,000, which increases by €10,000 depending on the number of children.
The new "Home Ownership for Families" subsidy program supports the construction or first-time purchase of a climate-friendly residential building. There are two subsidy levels:
- "Climate-friendly residential building" requires compliance with the requirements for an Efficiency House 40 and the Quality Seal for Sustainable Buildings (QNG) in terms of greenhouse gas emissions.
- "Climate-friendly residential building" with QNG meets all the requirements for Efficiency House 40 and the Sustainable Building Quality Seal (QNG-PLUS or QNG-PREMIUM) and receives a sustainability certificate from an accredited certification body.
The subsidy covers the entire construction costs, specialist planning and construction supervision services, as well as services for life cycle analysis or sustainability certification. Material costs from own work are also eligible for funding. The minimum technical requirements and the list of eligible measures and services correspond to those of the "Climate-friendly new construction – residential buildings" program.
KfW subsidy for "age-appropriate conversion" (KfW 159)
- Who is eligible for funding? Owners, tenants, housing cooperatives, municipalities, and public-law corporations
- How much is the subsidy? €50,000 per residential unit
- What conditions must be met? The measures must be carried out by certified specialist companies.
- Special features: KfW covers 100% of eligible costs up to a total of €50,000
A home is more than just a place to live. It is a place of security, comfort, and personal freedom. But what if your home suddenly becomes an obstacle course? The Federal Ministry of Building and Urban Development, together with the Kreditanstalt für Wiederaufbau (KfW), has created a program that addresses precisely this issue: the KfW program "Age-Appropriate Conversion" (Number 159). It supports measures to reduce barriers in homes and the living environment in order to enable people of all ages to lead independent lives.
What exactly is being funded? Quite simply, anything that helps to remove barriers. This can include modifications to the home, such as the installation of floor-level showers, the conversion of door thresholds, or the installation of handrails. But measures can also be taken in the living environment to make access to the building or the surrounding area barrier-free.
Funding is provided in the form of low-interest annuity loans with an impressive fixed interest rate for 10 years. This means that you do not have to worry about rising interest rates and can benefit from the advantages of this funding program in the long term.
KfW covers 100% of eligible costs, up to a maximum of €50,000 per residential unit. This funding therefore opens up the possibility of carrying out comprehensive, high-quality renovations without reaching financial limits.
Who can benefit from this program? The answer is simple: anyone who wants to make their home barrier-free. It doesn't matter whether you are an owner, tenant, housing company, or municipality.
Over time, KfW has repeatedly made changes to its subsidy programs in order to meet current requirements. It is therefore important to regularly check the current conditions and interest rates in order to obtain the best possible subsidy.
With KfW's wide range of funding options, you have access to financial resources to realize your dream home and modernize your home to be more energy efficient.
How do I apply for KfW subsidies?
- Find out about the available KfW programs:
Find out which KfW funding programs are suitable for your project. - Check the eligibility criteria:
Check whether your construction or modernization project meets KfW's requirements; consult an expert if you are unsure. - Plan ahead:
Make sure you have enough time to submit your application. Applications can sometimes be quite complex. Gather all the necessary documents: Prepare all the necessary documents. - Draw up a detailed cost plan:
Summarize all costs in detail. Check other financing options: Consider whether other financing options are available in addition to KfW funding. - Note the application deadlines:
Be sure to submit your application on time. Funding pots are often quickly exhausted.
