Reducing the backlog in residential construction:

• Launching on 16 December 2025
• Promotional loans of up to EUR 100,000 per housing unit, interest rate subsidised by federal government funds
• Promotion is specifically targeting the construction backlog – a building permit must be submitted with the application

The Federal Ministry for Housing, Urban Development and Building and KfW are working together to step up efforts to reduce the construction backlog. To achieve this, they are resuming a temporary promotion for new buildings that meet the “Efficiency House 55” standard. The promotion will be integrated into KfW’s existing “Climate-friendly Construction” promotional programme. From 16 December 2025 onwards, private and commercial investors with planned projects that have already received a building permit can submit applications for KfW promotional loans through their regular banks. Interest on loans is subsidised through federal government funds. Municipal authorities can receive the promotion in the form of a grant, which must be applied for directly from KfW.

Melanie Kehr, Member of the Executive Board responsible for domestic promotion at KfW, says:

“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 continues:

“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.”

Key data about the promotion:

• The promotion is available for new buildings and first-time purchases of residential buildings
  • that meet the technical requirements for the Efficiency House 55 standard
  • that do not use any fossil-based heat generators
  • that have a valid building permit in place at the time of application or, in the case of projects that do not require approval under the respective state building regulations, the competent building authority has been informed of the project and implementation is permitted to commence at the time of application

• A loan amount of up to EUR 100,000 can be applied for per housing unit. The interest rate is determined on the day the promotion begins and is subsequently published on the product pages by KfW. In principle, it is based on the development of the capital market and includes an interest rate reduction subsidised by federal funds. The maximum loan term is 35 years. The maximum fixed interest period is ten years.
• Non-residential buildings can also benefit from the promotion.
• Municipal authorities can apply for a grant in the amount of 5% directly from KfW.
• The following points are important for all new construction projects: The application must be submitted before the start of the project. Applicants are only permitted to conclude supply or service contracts for their project from 16 December 2025 onward, even if they contain a condition precedent. Retrospective promotion for supply or service contracts that have already been concluded is not permitted. Similarly, the following applies to first-time purchases: Sales contracts may not be concluded before 16 December 2025 - even if they contain a condition precedent. Retrospective promotion for sales contracts that have already been concluded is not permitted. Important: Construction work on site may only begin on and after 16 December 2025 (“first sod”).
• The promotion is temporary, i.e. dependent on the availability of federal funds used by KfW for interest rate reductions on promotional loans and for grants. There is no legal entitlement to the promotion.

KfW will publish the detailed product terms and daily interest rate conditions at the start of the promotion on 16 December 2025 at www.kfw.de/297, www.kfw.de/299 and www.kfw.de/498 (in German).