Anyone who wants to build in a climate-friendly way or convert a property in an age-appropriate manner can once again apply for funding and low-interest loans from the federal government. Federal Construction Minister Klara Geywitz (SPD) announced in Berlin on Monday that applications for corresponding funding programs could be submitted to the state bank KfW from Tuesday.
This involves funding for climate-friendly new buildings, age-appropriate conversions and cooperative living. However, it is unclear how long the funds will last. Recently, an important funding pot ran out of money.
The funding programs are important for the recently weakening construction industry, said Geywitz. “Every euro in funding triggers orders in the craftsmen’s books and stimulates domestic demand.” There are currently signs of a slight recovery in the construction industry. “Apartments are a product that is needed in Germany,” emphasized the minister. There is therefore little need to worry about sales and demand. The current motto must be: “Don’t spend too much time discussing it, just do it.”
Climate-friendly new building
The funding program for well-insulated and climate-friendly houses has not been in existence for a year – and after just ten months the money ran out in December. The result: funding stop. You can now apply for low-interest loans again.
The funds are used to support people who want to build new apartments and houses in an energy-efficient and sustainable manner or who want to buy such a new building. You get loans from KfW with significantly lower interest rates. In view of the increased capital costs, this is a “significant relief” for the builders, said Geywitz. From Tuesday, loans are to be granted at interest rates of 2.1 percent – well below the current market rate for construction financing. “Construction will then be back on a scale that can be financed,” said Geywitz.
Last year, according to the Ministry of Construction, the program supported 47,000 climate-friendly new apartments and triggered investments of 17.4 billion euros. The fact that the program will now be continued is an important signal to the German construction industry.
According to Geywitz, one billion euros are available – last year it was 1.68 billion. This makes it at least doubtful whether the money will be sufficient until the end of the year. The aim is to maintain the conditions all year round, emphasized Geywitz. “The federal government is aware of the importance of stable funding conditions.” Another billion is earmarked in the federal budget for climate-friendly new construction in the low-price segment.
The main association of the German construction industry criticized that the federal government “still owes a consistent and reliable housing construction policy.” The funding was already insufficient last year. In order to avoid a funding stop, the Bundestag must debate an increase in funding by summer at the latest.
Renovate according to age
Here, owners can receive subsidies from the federal government to make their house or apartment ready for old age. This means: lowering door thresholds to make it easier to use a walker or wheelchair, converting the bathtub into a shower or making stairs easier to climb. Geywitz emphasized that the aim is for people to stay in their own homes for as long as possible and not have to move to a care facility.
This year, 150 million euros would be available for this, twice as much as last year. Individual construction measures are subsidized with ten percent of the investment costs, up to a maximum of 2,500 euros. You can receive up to 6,250 euros for the entire renovation of a house. According to the ministry, in 2023 almost 31,000 apartments and houses were converted to be barrier-free using the program.
Cooperative living
The program for cooperative living has developed into a “hidden champion,” said Geywitz. The funding amount was therefore increased from 9 million euros last year to 15 million euros for 2024. The federal government is supporting people who set up their own cooperative in order to then build it or purchase shares in the cooperative.
In the future, you could take out loans of up to 100,000 euros at reduced rates. The interest rate is between 2 and 2.5 percent, depending on the term, and the repayment subsidy is 7.5 percent, said Geywitz. There are around 2,000 housing cooperatives in Germany that manage around 2.2 million apartments.
Further programs in 2024
Further funding programs are expected to be launched this year. The “Young Buys Old” funding, worth 350 million euros, is intended to support young families in buying old properties. The “Commercial to Residential” program is intended to subsidize the purchase and conversion of commercial buildings into apartments. 120 million euros have been 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 additional space being densified,” said Geywitz. One billion euros would be available for climate-friendly new buildings in the low-price segment.
