The Federal Ministry for Housing, Urban Development and Building and KfW have announced a new initiative to address the backlog in residential construction across Germany. Beginning 16 December 2025, private and commercial investors with approved building permits can apply for promotional loans through their banks as part of KfW’s “Climate-friendly Construction” programme. The interest on these loans will be subsidised by federal government funds.
This promotion specifically targets projects that meet the “Efficiency House 55” (EH-55) standard. Eligible applicants may receive up to EUR 100,000 per housing unit, with a maximum loan term of 35 years and a fixed interest period of up to ten years. The interest rate will be set at the launch date and published on KfW’s product pages.
Municipal authorities are also eligible for support, receiving grants amounting to 5% if they apply directly through KfW. Non-residential buildings can benefit from this scheme as well.
Melanie Kehr, Member of the Executive Board responsible for domestic promotion at KfW, stated:
“An apartment or house is more than just a roof over your head. It is a place that shapes everyday life and future prospects for people in Germany. By resuming the promotion for the EH-55 standard, we are now stepping up our efforts to ensure that new construction is financially viable, and that more much-needed housing can be built quickly. KfW and the Federal Government are joining forces to offer the best possible terms.”
She added:
“Our promotion stipulates that the new buildings must be heated exclusively using renewable energy sources. In this way, we are contributing to ensuring that ancillary costs remain affordable over the long term and that Germany stays on track to achieve its climate protection targets in its building stock.”
To qualify for funding, projects must have a valid building permit at application time or notification from relevant authorities if no permit is required under state regulations. All supply or service contracts related to construction must be concluded after 16 December 2025; retrospective funding is not allowed.
The scheme is temporary and subject to available federal funds used by KfW for interest rate reductions on loans and grants. There is no legal entitlement to receive this support.
KfW plans to publish detailed product terms and daily interest rates when the programme launches on 16 December 2025.