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KFW construction funding is possible again: you can apply for this

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KFW construction funding is possible again: you can apply for this

The funding program for environmentally friendly houses and apartments was exhausted after just ten months last year, which led to a funding stop. picture alliance / SvenSimon | Frank Hoermann/SVEN SIMON

From now on you can apply for grants and low-interest loans for environmentally friendly new buildings and age-appropriate conversions.

Federal Construction Minister Klara Geywitz (SPD) says that the loans will be granted from Tuesday at an interest rate of 2.1 percent.

Last year, 47,000 environmentally friendly new apartments were supported and investments amounting to 17.4 billion euros were initiated.

Anyone who wants to build in an environmentally friendly way or convert their property to suit their age can now apply for subsidies and low-interest loans from the federal government. As Federal Construction Minister Klara Geywitz (SPD) announced in Berlin on Monday, applications for corresponding funding programs can be submitted to the state-owned KfW bank from Tuesday. Funding includes, among other things, environmentally friendly new buildings, age-appropriate conversions and cooperative living. However, it is unclear how long the funds will last, as an important funding pot was recently empty.

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Building funding for climate-friendly new buildings

The funding program for well-insulated and environmentally friendly houses is not yet a year old and after just ten months the budget was exhausted in December. This led to a funding stop. You can now apply for low-interest loans again.

The funds are intended to support people who want to build or purchase energy-efficient and sustainable apartments and houses. KfW grants these developers loans at significantly lower interest rates. In view of the increased capital costs, this is a “significant relief,” said Federal Construction Minister Geywitz. The loans will be granted from Tuesday at an interest rate of 2.1 percent and are therefore well below the current market mortgage interest rates. This will bring construction back to an affordable level, emphasized Geywitz.

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According to the Ministry of Construction, 47,000 environmentally friendly new apartments were funded last year and investments amounting to 17.4 billion euros were initiated. The continuation of the program is an important signal to the German construction industry.

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According to Geywitz, there is currently one billion euros available, last year it was 1.68 billion euros. It is questionable whether this sum will be sufficient until the end of the year. The aim is to maintain the conditions throughout the year. “The federal government is aware of the importance of stable funding conditions,” emphasized Geywitz. In addition, the federal budget has earmarked another billion euros for climate-friendly new buildings in the low-energy sector.

The main association of the German construction industry criticized the fact that the federal government “still lacks a consistent and reliable housing construction policy.” The funding was already insufficient last year. In order to avoid a funding stop, the Bundestag must discuss increasing funding by summer at the latest.

Building funding for age-appropriate renovations

Here, homeowners have the opportunity to receive subsidies from the federal government to convert their house or apartment to make it age-appropriate. These include lowering door thresholds to make it easier to use walkers or wheelchairs, converting bathtubs into showers, or adjusting stairs to make them easier to climb. The aim is for people to be able to stay in their own four walls for as long as possible and not have to move to a nursing home, emphasized Geywitz.

There is 150 million euros available for this this year, twice as much as last year. Individual conversion measures are funded with ten percent of the investment costs, up to a maximum of 2,500 euros. For the complete renovation of a house you can get up to 6,250 euros. According to the ministry, almost 31,000 apartments and houses were converted to be barrier-free with the help of the program in 2023.

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Building funding for cooperatives

The program for cooperative living has developed into a “hidden champion,” said Geywitz. That is why the funding amount was increased from nine million euros last year to 15 million euros for 2024. The federal government supports people who want to set up their own cooperative in order to then build or acquire cooperative shares.

In the future, you will be able to take out loans of up to 100,000 euros at preferential conditions. Depending on the term, the interest rate is between two and 2.5 percent, with a repayment subsidy of 7.5 percent, says Geywitz. There are around 2,000 housing cooperatives in Germany that manage around 2.2 million apartments.

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Further programs in 2024

Further funding programs are to be launched in the current year. The “Young Buys Old” program with a volume of 350 million euros is intended to support young families in buying older properties. The “Commercial to Residential” program aims to promote the purchase and conversion of commercial properties into living space. 120 million euros are earmarked for this. “Nowadays we have a lot of empty offices, a lot of empty shops, and that is a good potential that can be created even without densification of additional space,” said Geywitz. One billion euros is available for climate-friendly new buildings in the low-price segment.

AA/dpa

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