Kfw funding freeze primarily affects new construction funding

Without announcement, the federal ministry of economics and climate change has issued a temporary kfw funding freeze for approval of loan applications for the federal efficient buildings grant (BEG) as of 24.1.2022 announced. According to deutsche presse-agentur, the ministries involved agreed on 1.2.2022, all applications submitted but not yet received by the time of the suspension of funding on 24. The kfw will still process applications submitted in january according to the old criteria.
As a reason for the sudden funding stop to the 24.1.2022 was mentioned that the financial resources for the kfw program 261 "energy-efficient construction" are exhausted. This kfw funding freeze thus affects all planned new buildings that could count on subsidized loans and grants by complying with the so-called energy efficiency classes. Not affected are renovation projects on existing buildings and the promotion of photovoltaic systems. What does this decision mean for your new building?

Kfw funding freeze hits planned new construction projects

The funding freeze affects certain programs that have been suspended effective immediately: as of now, no new applications for BEG funds can be submitted and approval of previously submitted applications has also been suspended.

This applies to the so-called efficiency house (EH) 55 in new construction, the EH 40 in new construction, the EH 40 plus as well as the energetic reorganization. The lower the respective figure is, the more energy-efficient the new buildings are.

The federal government justified the surprising step with the fact that alone the submitted and not yet approved applications would have exceeded the remaining funds by billions of euros. Between the beginning of november and mid-january, applications for 20 billion euros had been received. This exceeds the possibilities of the federal government, which handles the funding through the state-owned kfw bank. Building owners had applied for 14 billion euros for "efficiency houses 55" alone.

The end of subsidies for "efficiency houses 55

The funding program for energy-efficient houses 55 would originally have ended on 31 january 2022 anyway. January 2022 would have ended. This is the standard with the lowest efficiency requirements in the kfw funding guidelines. All applications that have not been approved by the deadline for the kfw funding freeze will therefore no longer be able to count on any subsidized loans or grants from kfw.

For applicants – one speaks of 24.000 applications for kfw funding for an efficiency house 55 that have been submitted but not yet approved – must now react. Two scenarios remain: either the new building is redesigned now to achieve a higher energy standard. Or you forego energy-saving measures altogether, which can make the construction project cheaper, but requires rescheduling and negotiations with the architect or building contractor. The construction company as a result. In both cases, contact must also be established with the lender or. Credit intermediary required to discuss the new situation.

Temporary kfw funding freeze for energy efficiency classes 40 and 40 plus

The federal ministry emphasized that they are already working on a quick solution and are realigning the subsidy program and defining new subsidy conditions. It is currently not foreseeable by when the programs will be relaunched in a new form.

This is not good news for anyone who is in the process of planning and financing a new building or the complete renovation of an existing property. Either people are now preparing for the subsidy measures to be tightened up, without knowing exactly which new standards will then have to be met. Or one renounces energetic measures and tries to realize the building project clearly more favorably – and without luxuriant subsidies and promotions.

The federal minister of building at least holds out the prospect of a rapid new regulation. "Anyone who tackles such a big project as building a house needs a secure framework," the minister told the bild newspaper. The government is already working on a new funding scheme. "People want to decide as soon as possible new funding opportunities. This means that there is a realignment for energy efficiency 40 new buildings. And to cushion hardship cases, the ministry of economy, together with kfw, is looking into a loan program that would provide low-interest loans to applicants whose applications have been rejected to prevent a liquidity gap in projects that are ready for construction.

For planning new buildings and complete renovations, this means in plain language: those willing to build will wait until the new regulations arrive. Or they have to reschedule and realize the construction project without funding and subsidies. Again, if you're already in loan negotiations with banks or cash-finance brokers, you need to discuss the best individual solutions with them and realign appropriate financing plans.

Funding for individual energy measures and photovoltaics are NOT affected by the kfw funding freeze

Kfw funding for energy-efficient refurbishments will resume immediately if budget funds are made available, says ministry. In addition, subsidies for individual energy measures continue to run. These run through the federal office of economics and export control (BAFA) and are not affected by the kfw funding freeze. This includes, for example, replacing an old heating system or insulating the building envelope. Grants in five figures are still possible here. In addition, the kfw program 270 "renewable energy – standard" is not affected by the stop. This means, for the installation of photovoltaic systems for electricity production and combined heat and power plants can benefit from low-interest loans.

What will happen after the kfw funding freeze??

The energy advice of the consumer center recommends in a first statement that consumers who have been caught cold by the stop should remain calm. If there is enough time available and no decision is needed in the next two months. In this time the calculation is to be checked. Whether and how a house then wwird is built, always depends on the individual case. It is also within the range of possibility that a new building then no longer fulfills increased energy standards, because one can build then kostengunstiegr. But this is not good news for climate protection. It is also necessary to examine whether it might be possible to switch to other programs – z. B. Country support programs – changes.

In the case of complete renovation of an existing property, special subsidies for individual measures (roof insulation, windows, heating system renovation) make it possible to quickly and efficiently circumvent the kfw subsidy freeze.

Use the advice of bank-independent loan brokers

In addition to the advice of the consumer center, which can provide comprehensive information about possibilities of energy-efficient construction, the contact with a bankuabhangigen construction financing intermediary – or if the negotiations are already well advanced – with the bank is important.

It is necessary to weigh together how long one can wait for the federal government to realign the terms of the subsidy, what that means in the context of the current fluctuating interest rate markets, and whether financing without subsidy or. Government subsidies are possible and, above all, useful. Those who want to realize their desire for real estate should not simply wait, because according to forecasts purchase or. Building prices as well as the building money interest rates do not develop backwards. And with comprehensive knowhow, financing and construction can continue to be optimal and affordable.

Kfw loans for rehabilitation help modernize and increase the value of an existing property with low-cost money from the government.