• Repurposing of previously non-residential properties to create new living spaces
• From 1 July 2026, grants of up to EUR 30,000 per new residential unit
• Applications for federal funding can be made directly to KfW

Starting tomorrow, 1 July 2026, anyone who converts unused, vacant commercial premises into residential accommodation and carries out energy-efficiency improvements will be eligible for grants of up to EUR 30,000 per residential unit: To this end, the Federal Ministry for Housing, Urban Development and Building, together with KfW, have launched the new ‘Commercial to Residential’ funding programme. The grants are funded by the Federal Government and applications are made directly to KfW.

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

"In many of German city centres today, there is a clear paradox: On the one hand there are vacant offices and abandoned retail premises, while on the other there is a massive need for living space. With the new “Commercial to Residential” funding programme, we are aiming to actively promote the conversion of previously commercial sites to create additional housing, as well as to foster liveable neighbourhoods and climate-conscious urban development. This means that a twofold benefit can be drawn from unused space: homes for people looking for a place to live, and a powerful boost for strong, vibrant city centres."

Key elements of the “Commercial to Residential” promotion:

• The programme provides grants for the conversion of heated buildings or parts of buildings not previously used for residential purposes into residential accommodation. The conversion must lead to the creation of at least one new housing unit. Eligible measures include, for example, adapting the building’s structure to the intended residential use, making alterations to the floor plan, interior fit-out, or redesigning outdoor areas for residential use, including the removal of ground paving.

• The newly built residential units must be renovated to meet the ‘Efficiency House 85 Renewable Energies’ (EH 85 EE) energy efficiency standard at the minimum, while listed buildings and other structures of particular heritage value must be renovated to the ‘Efficiency House Heritage EE’ standard. Exemptions from the Renewable Energies (EE) class are provided for buildings fitted with a new heating system. Customers have 54 months to implement the project after their application is approved. Payment is made after the project is completed and the eligible costs and energy efficiency level are confirmed.

• All investors are eligible to apply, e.g. private individuals, owners’ associations, companies and local authorities.

• The grant amounts to 30 per cent of the eligible costs for a maximum of EUR 100,000 per residential unit, i.e. up to EUR 30,000 per residential unit. The costs of conversion are considered eligible for funding, while those relating to the energy efficiency-related refurbishment of the residential units are not. Other promotional programmes such as the “Federal Funding for Efficient Buildings” can be used for this purpose. (www.kfw.de/261; www.kfw.de/263; www.kfw.de/264; www.kfw.de/464)

• For all parties other than owner-occupiers, it should be noted that the grant must be reported as state aid in accordance with the European de minimis Regulation. The ceiling for de minimis aid is EUR 300,000 over three years.

• Funding is subject to the availability of Federal Government funds. There is no legal entitlement to the promotion.

Detailed product conditions for the “Commercial to Residential” funding offer are available at www.kfw.de/266.