Real Estate Loan: Government Grants

If you take out a real estate loan, you usually want to either build or buy a house or buy a condominium. But refurbishment and modernization work can be financed with such a loan. However, taking a loan costs money; but with the help of various state subsidies, it is quite possible to significantly reduce the costs.

Housing Riester

Residential Riester offers not only a state subsidy, but the accumulated money can also be deducted as special expenses from the tax.

Residential Riester is certainly one of the best known state subsidies. Here, part of the existing income is regularly paid into the specially established, Wohn-Riester contract. For the savings one receives grants from the state. But that’s not all, because the amount already paid can then be deducted from the tax: this falls under the “Special Editions” section.

However, it should be noted that the amount paid for a property must be used. However, it is generally also feasible to pay the sum into a home savings contract.

Residential Riester is usually recommended for high earners as well as for families with children.


The Baukindergeld is under certain conditions families at least a child who buy or build a property.

Since 1 January 2018, families with at least one child who choose to build or buy a property will, under certain conditions, receive construction allowance. Since it is often a not to be despised sum, it may well be worthwhile to ask here once directly with the respective authority.

Housing Promotion

Housing promotion is specifically designed for low-income families. However, here the annual income must not exceed a certain amount and there must be sufficient equity.

The term housing subsidy hides a state subsidy, which is aimed specifically at low-income families. For example, subsidized building land, financial subsidies and low-interest loans are promoted here.

It should be noted, however, that prospective applicants may have sufficient equity and that the annual income of the household does not exceed a certain amount.

Credit from KfW Bank

KfW Bank offers low-interest loans when buying or building a home.

If it concerns the purchase or construction of one ‘s own four walls, then KfW Bank grants low – interest loans. In the latter fall in addition to the construction costs, for example, also construction costs and land costs. But also costs for the outdoor facilities are included. If it is an existing house, then the most diverse renovation and conversion costs can also be promoted.

If it is a house that stands out due to its high energy efficiency, then KfW even offers a special program for this purpose. In this way, the loan amount can be increased and the banks then usually offer a subsidy for repayment.

However, the loans can not be applied for directly from KfW Bank: the bank that lends out the real estate loan initiates everything here.

Renovation and modernization measures

KfW Bank and the Federal Office of Economics and Export Control offer various subsidies.

When buying a house, the most diverse conversion measures are often necessary. This often affects above all the energetic area. So it is possible, for example, that the roof needs a new insulation and / or a completely new heating system is needed. If you want to increase the energy efficiency of your home, you will receive funding from KfW Bank for certain measures. If, for example, there is a heating system in the house, the installation of which was completed before January 2009, low-interest loans will be offered for the following models:

  • Combined heating systems
  • biomass plants
  • Solar collectors; up to 40 square meters of space
  • Heat pumps

But the Federal Office of Economics and Export Control also contributes to the promotion of renewable energies in the heating sector. It should be noted, however, that the Office does not grant loans, but grants subsidies. In order to get a subsidy for existing houses, there must have been a heating system there for at least two years, which one now wants to support or replace. In addition to heat pumps, the office also supports solar collector and biomass plants.

It is also possible to combine the subsidies of the office with those of KfW Bank. However, the total sum of the costs to be invested must not be exceeded here.

Conversion: age and burglary protection

KfW-Bank supports renovations for burglary protection and for age-appropriate living. But the federal states also offer subsidies for various modernization and renovation projects.

As you get older, things get harder and harder. Climbing stairs, as an example, can then become a real problem. However, age-appropriate conversions are also funded by KfW-Bank. This can either be an investment grant or a low-interest loan. The age of the applicant is also not decisive, so it is quite feasible to make provision here.

Even if reconstruction measures for burglary protection are carried out, this is supported by the KfW Bank.

Restructuring and modernization measures can, however, also be subsidized by the respective federal states with subsidies or favorable loans. Here, for example, also includes a floor plan change or various work to improve the living. Since the respective subsidies vary depending on the federal state, it is advisable to ask in advance in this regard in advance of the corresponding promotional bank for the eligible measures and the necessary conditions.


Since a real estate loan can be used for a wide range of subsidies, it makes sense to inquire about this in good time in advance.

Anyone who applies for a real estate loan, inquires best already in advance on the appropriate funding options for their own project. After all, it is possible when building or buying a property to obtain low-interest loans or subsidies. Since this is often a not to be despised sum, it is quite worthwhile to inquire about this exactly. In this way, the real estate loan is usually not only cheaper, but it is often also feasible to obtain a higher loan amount .

This does not only apply to the construction or purchase of a property, but also to the various modernization and renovation measures. Even conversions that are made for age or burglary protection are mostly eligible. The same applies if the conversions lead to a better energy efficiency of the house.

Thus, when building / buying a property or in the various refurbishment and modernization work quite a lot can be saved.

The various banks, the Federal Office of Economics and Export Control as well as the respective offices of the federal government and the provinces offer themselves as contact persons for the various funding opportunities.