The federal government wants to support families more than before in building their own, climate-friendly house. The conditions for low-interest loans through the “Home Ownership for Families” program would be significantly improved, the Ministry of Construction announced on Monday. “This will give even more families access to the funding program,” it said. The new conditions apply directly from Monday.
With the program, the federal government is trying to combat the construction slump that has been going on for months. Due to increased interest rates and expensive building materials, housing construction in Germany has stalled overall. Fewer and fewer families and the commercial real estate industry are choosing to build. At the same time, there is not enough living space.
The mood in housing construction is on the ground
The mood in German housing construction is worse than ever in at least 32 years, the Munich Ifo Institute found on Monday. The business climate in the industry surveyed by the Ifo fell to minus 54.8 points in September, the lowest level since the survey began in 1991. There are also more and more cancellations. 21.4 percent of the construction companies surveyed were affected by this in September. “Many projects are no longer economically feasible due to higher interest rates and increased construction costs,” said Ifo expert Klaus Wohlrabe.
Criticism of low income limits
Building Minister Klara Geywitz emphasized the following about the funding program: “With our home ownership promotion, we specifically support families who want to fulfill their dream of owning their own house or apartment in a new building.” However, the KfW development bank’s program, which has existed since June, flopped at the start. In the first two months only 104 applications were submitted.
Experts attributed the low number of applications to the strict criteria. Because: The builders were not allowed to earn too much. For families with one child, there was previously a taxable household income limit of 60,000 euros. Families with two children were allowed to earn 70,000 euros to be eligible for funding. Experts criticized that these families could hardly afford the required standards for energy efficiency despite funding.
Adjustments also to interest rates
The federal government is now significantly increasing the criticized income limit: According to the Ministry of Construction, one-child families with a taxable income of up to 90,000 euros are now eligible. For each additional child, an additional 10,000 euros is added, so that a family with two children can earn up to 100,000 euros.
“We are also increasing the maximum loan amounts by 30,000 euros,” explained Construction Minister Klara Geywitz (SPD). “And all of this for extremely attractive interest rates of less than one percent.”
Specifically, 170,000 euros can now be borrowed under favorable conditions for climate-friendly buildings. This applies to families with one or two children. Larger families and families who build in an even more climate-friendly way can get more money. The maximum amount is a low-interest loan of 270,000 euros for families with five children whose house meets particularly strict climate criteria.
Which houses are eligible
New construction and the first purchase of a newly built house are supported. The prerequisite is that the family wants to live in the house themselves – and does not already own other residential property. Holiday apartments and second homes are not funded.
In order for Germany to achieve its climate protection goals, the loans are only available for new buildings with a low CO2 footprint. Specifically, they must at least meet the EH40 standard. This means that the building can only use 40 percent of the energy that a standard house requires. In order to achieve the higher funding level, the even stricter criteria for the sustainable building quality seal must be met.
