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Promoting Housing Construction

Given the catastrophic housing shortage in post-war Germany, housing construction had top priority. This is why in 1949 KfW began providing low-cost financing for housing construction. By 1950, 350,000 homes were completed at a capital outlay of 1.8 billion euros. KfW thus achieved a financing share of twelve percent for the housing construction sector. By the end of 1953 KfW had committed a total of 318.5 million euros for housing construction. During the second half of the 1950s, KfW channelled an increasing volume of European Community funds for coal and steel into housing construction – chiefly to promote housing for miners.

Boosting the construction sector

prefabricated concrete housing
Once rehabilitation and maintenance work was completed, the prefabricated concrete housing of the former GDR became virtually unrecognisable. Here is one example in Berlin-Lichtenberg, photographed in 1994.

By the 1960s the promotion of domestic investment as a whole had come to play a minor role, which meant that housing construction also lost importance for KfW. This did not change until the late 1980s. In 1985 KfW began by expanding its own programmes in order to boost activity in the flagging construction sector. In the autumn of 1989 a housing programme worth 766.9 million euros was launched to create rented apartments in existing buildings.

Rehabilitation and modernisation in the new federal states

In the early 1990s German reunification brought a new dimension to housing promotion. In October 1990 the housing modernisation programme was launched in the new federal states in eastern Germany. Initially it was private property owners who very keenly took advantage of the programme. Later on the programme was used to rehabilitate and modernise prefabricated concrete housing estates. In the 1990s to early 2000 alone, over 3.6 million homes were modernised using funds from the housing modernisation programme – equivalent to half the number of homes that existed in the GDR when the wall came down. In 1998 the KfW housing programme was expanded as part of the German Government's employment initiative. Since the mid-1990s KfW has been extending low-cost promotional loans to support young families all over Germany in buying their own homes. Since then, KfW has helped over a million homeowners turn their dream of living within their own four walls into reality.

Housing promotion for environmental protection and climate change mitigation

energy-saving modernisation
Tackling a home project is worthwhile: KfW is strongly committed to promoting the energy-saving modernisation of homes.

In the last couple of years KfW has introduced a stronger focus on helping protect the environment and mitigate climate change in its housing promotion activities. KfW had already launched an initial programme to reduce CO2 emissions in 1996. In February 2006 the German Government and KfW then started the extremely successful "Housing, Environment, Growth" programme. Since then, the energy-saving rehabilitation of residential buildings and the construction of new energy-saving houses have been at the top of the agenda.

In 2009 KfW introduced the "senior-friendly conversion" programme, in response to demographic change in Germany. This financing instrument is being used largely by private property owners and homeowners to convert their units into senior-friendly and accessible homes. For the first time this programme is setting a Germany-wide standard for senior-friendly accessibility within the housing stock.


KfW Group

Palmengartenstrasse 5-9

60325 Frankfurt am Main



+49 69 74 31 0


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