Families should receive cheap house loans from KfW


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Status: 05/31/2023 5:01 p.m

The federal government is launching a new subsidy program for the construction of new climate-friendly houses. From June, families with low and middle incomes can get loans from KfW at low interest rates. But there is also criticism.

From June, families with low and middle incomes can receive low-interest loans from the state development bank KfW for the construction or purchase of a new climate-friendly house. At the start, an interest rate of 1.25 percent applies to a loan with a term of up to 35 years and a fixed interest rate of ten years, announced Minister of Construction Klara Geywitz (SPD) today. This is significantly cheaper than the current market interest rate of around 3.5 percent.

The support program “Home ownership for families” (WEF) is the successor to the child allowance and is intended to support the formation of property. A family with two children could save around 40,000 euros when building a particularly climate-friendly house, explained Geywitz. “The new program is a reliable support for owners and makes climate-friendly construction projects plannable and affordable.”

In Münster, the construction of detached single-family homes is to be severely restricted.

Three quarters of households eligible?

Families with at least one minor child can receive the new funding. They may have a maximum taxable household income of 60,000 euros. With each additional child, this limit increases by 10,000 euros. According to Geywitz, three quarters of all households in Germany are entitled to claim.

Nevertheless, the income limit is the biggest point of criticism. “Anyone who wants to take advantage of this funding needs a low income and must be wealthy at the same time,” said housing market researcher Matthias Günther from the Pestel Institute of the “Funke Mediengruppe”.

Michael Neumann from the credit broker Dr. Klein criticized that only a few could afford the required standards for energy efficiency, despite the funding. Geywitz, on the other hand, emphasized that the average income of applicants for child benefit was based on the average income, which was less than 60,000 euros.

Favorable loans of up to 240,000 euros possible

Another requirement is that the family wants to live in the house themselves – and does not already own another home. Holiday homes and second homes are not funded. The level of support depends on the number of children. At the lower funding level, a family with one or two children can borrow a maximum of 140,000 euros at low interest. This sum increases to 190,000 euros with five children.

On the other hand, energy efficiency plays a role. The loans are only available for new buildings with a low “CO2 footprint” so that Germany can achieve its climate protection goals. Specifically, they must at least meet the EH40 standard. This means that the building may only use 40 percent of the energy that a standard house needs.

Anyone who builds even more climate-friendly and thus fulfills the sustainable building quality seal can get 190,000 euros with one or two children, and up to 240,000 euros with five children. However, it is criticized that this is not enough to build a house in most areas in Germany.

Buyers of newly built, climate-friendly residential property can also get cheap loans. The buildings must be purchased within one year of acceptance and must also meet the climate and efficiency standards. But there is criticism here too. “With the current income limit, it is simply no longer possible in many cities to purchase a property that is subsidized,” said the Central Association of the Construction Industry. “The purchase prices are simply too high for many potential buyers.”

Building Minister Geywitz is now questioning the high standards of energy efficiency.

Cities restrict construction of single-family homes a

If you want to apply for a cheap loan, you have to work with an energy efficiency expert. This checks and confirms that the requirements are met. The loan is then applied for before the start of construction at a bank, savings bank, building society or financial intermediary. According to Geywitz, at least 350 million euros are available for this year to make the cheap loans possible. She cannot yet name a sum for the following years, as the government is still working on the federal budget for 2024.

The subsidy program is also a reaction to the recent decline in the number of new single-family homes. Because of the sharp rise in interest rates and high material costs, there was considerable uncertainty among the citizens, according to Geywitz. “Of course, that upset a lot of calculations, including those made by families. And this is where this new funding comes in.”

However, the detached single-family house has long been criticized because it requires a lot of space, but at the same time only offers living space to comparatively few people. Therefore want Cities like Münster restrict the construction of such buildings for reasons of climate protection and due to a lack of space. In other parts of Germany there are already regulations on this.

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