New era for families: KfW support for home ownership improved

New era for families: KfW support for home ownership improved

According to a report from www.schwaebische.de, the federal government has ushered in a new era for the promotion of home ownership with the expanded KfW “Home Ownership for Families” program. The general conditions and the loan amounts have been significantly improved. From October 16, 2023, new regulations will apply that may have a significant impact on the market and the financial industry.

The most important changes concern the income limit and the maximum loan amount. The limit of a family's taxable household income has been raised to 90,000 euros and can be increased by 10,000 euros with each additional child. This means that a family with three children can earn up to 110,000 euros in order to benefit from the expanded KfW funding.

The maximum loan amount for the Family Home Ownership program has also been increased. KfW states that the amount has increased by up to 35,000 euros to 170,000 to 270,000 euros. Two crucial factors play a role: the number of children and the climate-friendliness and sustainability of the new building.

The impact of these changes can be significant. The higher income limits mean that more families can benefit from KfW funding and realize their dream of owning their own home. This could lead to an increased need for construction financing and thus stimulate the market for construction and real estate loans.

The interest conditions have also been improved. The effective annual interest rate for a loan with a term of 35 years and a fixed interest rate of ten years is 0.61 percent at the start of the new funding conditions; in the old funding program it was still 1.25 percent. Even with shorter terms, interest rates drop significantly.

Families with children and single parents can apply for KfW funding if they meet certain requirements. This includes, among other things, that the subsidized property is lived in and that at least one child under the age of 18 lives in the household.

The expanded KfW program “Home Ownership for Families” is intended to support more families in building their own home. Experts assume that the new regulations will lead to the program being used more than before.

Overall, the changes in KfW funding can help more people take the step into home ownership and give the construction and financial sectors a new boost. However, it remains to be seen how the measures will impact the market in the long term.

Source: According to a report from www.schwaebische.de