KfW funding program "Jung kauft Alt" has started
For whom is the program worthwhile?
On September 3, 2024, the new "Jung kauft Alt" funding program was launched by the Kreditanstalt für Wiederaufbau (there are also other KfW loans available here) in cooperation with the Federal Ministry of Housing, Urban Development and Building (BMWSB). The aim of the program is to support young families with medium and low incomes in the purchase and renovation of existing properties in need of refurbishment. But for whom is the program worthwhile and what conditions are attached to it?
What is "Jung kauft Alt"?
Financing real estate has become expensive due to the rise in interest rates in recent years. "Jung kauft Alt" (Young buys old) is a German government funding program that aims to enable families with underage children to purchase older properties in need of renovation. The aim is to make the dream of home ownership a reality for families with medium and low incomes through low-interest loans from KfW. The loans are specifically designed for the purchase and necessary energy-efficient refurbishment of properties that currently have poor energy efficiency.
Target group of the development program
The program is aimed at families with at least one minor child whose annual taxable household income does not exceed EUR 90,000. The income limit increases by 10,000 euros for each additional child. It is important that the subsidized families have not claimed any other subsidies such as the "Baukindergeld" or the "Home Ownership for Families" program and that they do not own any other property at the time of application.
Requirements for the properties
Only existing properties that are classified in energy efficiency classes F, G or H at the time of application are eligible for funding. These classes can be found in the energy performance certificate and are characterized by a particularly high energy requirement, which makes the properties in need of refurbishment. These classes are characterized by particularly high energy requirements, which makes the properties in need of refurbishment. Within four and a half years of purchasing the property, the owners must bring the energy efficiency of the building to at least the level of an Efficiency House 70 EE. This means that after refurbishment, the building will only consume 70 percent of the energy of a legally defined standard house.
Financial support: loan amount and interest rates
The loan amount depends on the number of underage children living in the household. Families with one child can apply for up to 100,000 euros, with two children up to 125,000 euros and with three or more children up to 150,000 euros. The loan term can be between seven and 35 years, whereby the interest can be fixed for a maximum of 20 years depending on the term variant. An example: with a term of 35 years and a fixed interest rate of ten years, the effective interest rate is currently 1.51 percent.
Savings potential and combination with other subsidies
Families can make considerable savings thanks to the reduced-interest loans. According to Building Minister Klara Geywitz, a family with two children can save up to 18,000 euros through the program compared to conventional bank loans. In addition to the loans from the "Jung kauft Alt" program, other low-interest loans and grants from the Federal Subsidy for Efficient Buildings (BEG) can also be claimed, for example for the installation of climate-friendly heating or other measures.
Objective of the program
The funding program has several objectives. Firstly, it is intended to make it easier for lower-income families to access home ownership by enabling the purchase of more affordable existing properties. Secondly, the program promotes the sustainable use of existing properties by preventing them from becoming vacant and increasing their attractiveness through energy-efficient renovations. The program also makes a contribution to the energy transition, as energy-efficient renovations significantly reduce energy consumption and CO2 emissions from buildings.
How the "Jung kauft Alt" subsidy program pays off for families!
The "Jung kauft Alt" funding program offers valuable support for young families who want to purchase existing properties in need of renovation and renovate them to make them more energy efficient. It represents a combination of financial support and a contribution to the energy transition by facilitating the purchase of residential property and at the same time reducing energy consumption in existing buildings. Despite criticism of its effectiveness in terms of the housing crisis, the program offers a sensible option for families who want to realize the dream of owning their own home.
Despite the positive objectives, there is also criticism of the "Jung kauft Alt" program. Deutsche Umwelthilfe (DUH) complains that the program does not make a significant contribution to solving the housing crisis and would rather lead to people being pushed out of the cities and into the countryside. DUH also criticizes the release of funds from the climate fund, particularly in view of the cuts in other areas of the fund.
