A construction financing can become more favorable by the stately promotion by promotion programs of the KfW bank. These subsidy programs must be applied for through a credit institution, as the Kreditanstalt fur Wiederaufbau (KfW) does not grant loans directly to building owners. The bank then passes on the discounted interest rate to the real estate buyer or builder. Thus the real estate owner receives a favorable construction financing.
What is the KfW Bank?
KfW Bank was founded in 1948 to provide financial support to the German economy. The required start-up capital came from the funds of the European Reconstruction Program. Medium-sized companies have also been receiving support since 1950. Since the passage of the law on the reorganization of ERP economic development on 29. March 2007, equity capital in the amount of 4.65 billion euros and subordinated capital in the amount of 3.25 billion euros were transferred from the ERP's special assets to KfW's assets. Private individuals who want to purchase, renovate or build a new home are supported by KfW Bankengruppe through various development programs and development loans. As a rule, the usual real estate financing by banks is combined with the support programs of KfW. But what does this bank actually promote? Mortgage banks receive compensation from KfW Bank for the loan processing and hedging carried out. A part of this remuneration is passed on by some banks to their customers as interest reduction. While in the past only young families and single parents were eligible for subsidies, the loans are now completely independent of marital status and age. Those interested in an installment loan can contact their bank or compare possible alternatives on this website.
Promotion of renovation measures by the Kreditanstalt fur Wiederaufbau (Reconstruction Loan Corporation)
Not only the acquisition of a real estate or the new building is promoted by the KfW bank, also planned reorganization and energy saving measures are supported. The subsidies offered by the KfW banking group range from low-interest loans for modernization, purchase or conversion to the payment of subsidies, in particular for energy-saving measures and energy generation using renewable energies. A special offer is provided by the "Energy-efficient renovation individual measures" subsidy program – see also this article. Grants are paid here for measures to renew heating systems and thermal insulation. But also a window exchange and ventilation installation are supported.
Funding opportunities from the Kreditanstalt fur Wiederaufbau for an age-appropriate conversion of an apartment or house
The "Modernize Housing" program supports owners, such as owner-occupiers, landlords and housing companies, in converting their property to make it suitable for senior citizens. KfW's own funds are used to finance low-interest loans. The "Altersgerecht umbauen" ("Age-appropriate conversion") program also supports age-appropriate conversion, although federal budget funds are used here.
The KfW bank pays subsidies of up to 2.500 euros for an age-appropriate conversion of one's own four walls. If the conversion costs are at least 6.000 euros, KfW will cover five percent, up to a maximum of 2.500 euros. If the landlord agrees, tenants can also claim this subsidy. All measures that serve to facilitate living in old age are promoted. This is, for example, the installation of a stair lift or the construction of a ramp for the wheelchair user. Or even the senior-friendly conversion of the bathroom.
Although not all banks cooperate with the KfW Bank and pass on the interest rate discount to the customer, a low-interest construction financing with the KfW Bank is worthwhile for the developer. When comparing providers, this point should be taken into account and accordingly a construction financier should be chosen that cooperates with the KfW Bank.