KfW, Germany's state-owned development bank, lends home buyers money on top of their bank loan, often at a lower rate and with longer terms. Anyone buying a home to live in can use its home ownership loan of up to €100,000; families with children under 18 and a household income within the limit can borrow more, for a new energy-efficient home or an old house they renovate. You don't apply to KfW yourself: your bank or financing expert applies for you, and it has to happen before you sign the purchase contract at the notary.
1. What KfW is and how its loans work
KfW (Kreditanstalt für Wiederaufbau) belongs to the federal government and the states (§ 1 KfW Act). It promotes home ownership and energy-efficient building with loans, and with some grants, on conditions the federal government sets.
A KfW loan doesn't replace your mortgage. It is one part of the financing, next to the bank loan and your own money, and it reaches you through a bank, a savings bank, a building society, an insurer or a financing expert working with them. That partner applies for it on your behalf, pays it out and takes on the risk that you repay (KfW leaflet 124), so it checks your creditworthiness as it would for its own loan and asks for the usual security, a land charge on the home as a rule. Not every bank passes KfW loans on, and those that do don't all offer every programme.
KfW's leaflets set no citizenship requirement; what they ask is that the home is in Germany and, for the buyers' programmes below, that you live in it. KfW publishes its current rates in its conditions table; they follow the capital market and change often, which is why this guide quotes none.
2. The loans for buying a home
As of October 2026, these KfW programmes are open to a private buyer:
- Home ownership programme (Wohneigentumsprogramm, 124). For building or buying a house or flat you live in, new or old, with no income limit and no children required. Up to €100,000 per project, for the price, the buying costs and work on the home (KfW programme 124).
- Home ownership for families, new build (Wohneigentum für Familien, 300). For families building a new home, or buying one within 12 months of the building's completion, to a high energy standard (Efficiency House 40 with limits on life-cycle emissions). Up to €170,000 to €270,000, depending on the number of children and the standard (KfW leaflet 300).
- Jung kauft Alt ("young buys old", 308). For families buying an existing home with a poor energy rating and renovating it. Up to €140,000 to €180,000, depending on the number of children (section 4).
- Climate-friendly new build (Klimafreundlicher Neubau, 297). For anyone building, or buying within 12 months of completion, a new home to live in, to the same high standard, with no income limit or children required. Up to €100,000 per home, or €150,000 with a sustainability certificate (QNG) (KfW leaflet 297/298).
- Cooperative shares (Genossenschaftsanteile, 134). For the shares a housing cooperative asks before you move into one of its flats. Up to €150,000, with 15 % of the loan written off as a grant if you live there long enough (KfW programme 134).
Some programmes combine, as long as the total stays within the eligible costs: the home ownership loan (124) goes with the family new-build loan (300) or the climate-friendly new-build loan (297), for example. The two new-build programmes (300 and 297) don't combine with each other for the same home.
3. The family programmes: who qualifies
The two family programmes, for a new build (300) and for an old house (308), share their conditions on the household. You qualify if, when you apply:
- A child under 18 lives in your household. Only children already born count.
- Your household's taxable income is at most €90,000 with one child, plus €10,000 for each further child: €100,000 with two, €110,000 with three. It is taxable income (zu versteuerndes Einkommen), after allowances and deductions, not your gross salary.
- Nobody in the household already owns a home in Germany: whether you live in it, let it, or it stands empty (KfW leaflet 300).
- You haven't had family funding before: Baukindergeld, or one of these two programmes.
The income is the average of the second and third calendar years before you apply, so for an application in 2026, of 2023 and 2024. You prove it with your income tax assessments (Einkommensteuerbescheide) for those years. If you lived abroad then, foreign tax certificates count, with a certified translation (KfW programme 308). If you came to Germany recently and never filed a return there, ask the bank early which papers it will accept; that is often the slowest part.
You have to live in the home yourself. In the new-build programme, if you stop doing so within five years of moving in, the rate goes up by one percentage point (KfW leaflet 300).
4. Buying an old house to renovate
Jung kauft Alt (308) pays towards the purchase price of an existing house or flat in poor energy shape, on the condition that you bring it up to standard (KfW leaflet 308):
- The building: its energy certificate (Energieausweis) has to show class F, G or H when you apply. Ask for the certificate early; the seller has to show it to buyers at the viewing anyway (§ 80(4) GModG, the former GEG). How to read it: the energy certificate guide.
- The renovation: within 54 months of KfW's commitment the home has to reach at least Efficiency House 85 EE, or you carry out a set of single measures: new heating running on at least 65 % renewable energy, new windows, and insulation of the facade and the roof or top-floor ceiling. Parts that already meet the standard are left out. An energy-efficiency expert confirms the efficiency-house route.
- The amount: up to €140,000 with one child, €160,000 with two and €180,000 with three or more, at most the purchase price. KfW raised these amounts for applications from 3 August 2026 (KfW, 30 July 2026). The loan runs for at least seven years.
- If the target is missed but the home reaches at least Efficiency House 100 EE, the rate goes up by one percentage point.
The loan pays for the purchase, not the work. The renovation itself can be financed with KfW's renovation loan (261) or the heating grant (458), which you apply for separately and, for the heating grant, yourself, in KfW's online portal (KfW programme 458). Each has its own start rule, so plan the order with whoever arranges the financing.
5. Apply before you sign
KfW funds only projects that haven't started, and for a purchase, signing the notarial purchase contract is the start; for building, it is the start of work on site (KfW leaflet 124). In practice:
- Talk to the bank before the notary date, not after. Once the contract is signed, the KfW loan is lost for that home.
- For the family programmes and the new-build loan, what counts is the day the application reaches KfW, not the day you hand it to the bank (KfW leaflet 308), so leave time between the two.
- A conditional contract is the way out of a tight date. A purchase contract made conditional on KfW's commitment (aufschiebende Bedingung) doesn't count as the start (KfW leaflet 300). The condition has to be in the contract when you sign it; ask the notary to draft it in, and know that sellers don't always agree.
The order matters for the bank loan too: the reservation guide explains why the financing should be binding before the notary appointment.
6. How it fits into a financing plan
With round numbers: a couple with two children buys an old house for €400,000. The buying costs (transfer tax, notary, land registry, agent) come to about €40,000, and they bring €80,000 of their own money. They need €360,000 more.
- The house's certificate shows class G and their taxable income averages €85,000, under the €100,000 limit for two children, so they can apply for Jung kauft Alt: up to €160,000.
- The bank lends the remaining €200,000 as an ordinary mortgage, with its own fixed rate.
- The renovation, due within 54 months, is a separate budget, with its own loan or grant.
Two loans means two rates, two fixed periods that may end at different times, and two monthly payments, or one if the bank combines them. Whether the KfW part makes the whole cheaper depends on its rate against the bank's on the day, and on the renovation, so treat this only as the method.
7. What a KfW loan gives you, and its trade-offs
What it gives you:
- A rate that is often lower than the bank's for the same period; in the family programmes, the federal government pays part of the interest during the first fixed period.
- Long terms and repayment-free years. Terms of up to 35 years, with up to five years at the start in which you pay only interest, which eases the first years in a new home.
- The better of two rates. In the family and new-build programmes, the lower of the rate on the day KfW receives the application and the rate on the day it commits applies (KfW leaflet 300).
What to weigh:
- Less freedom to repay. In the programmes above, during the fixed period you can't pay off part of the loan early, only all of it, and then against a prepayment charge (Vorfälligkeitsentschädigung). A bank loan often allows yearly special repayments (paying down a mortgage).
- Conditions you have to keep. Living in the home, the renovation deadline, the energy standard, each with a higher rate if you don't.
- Paperwork and time. Income proof, an energy-efficiency expert for the energy programmes, and an application that has to reach KfW before the notary.
- Funds can run out. There is no right to funding; the programmes run within the federal budget, and conditions change, sometimes at short notice.
8. Buying to let
The home ownership loan, the family programmes and the cooperative loan are for homes you live in. For a flat to let, KfW funds energy, not ownership: a new build to the high standard (298, the landlord's version of 297), and renovation to an efficiency house through the renovation loan (261), which doesn't ask you to live there (KfW leaflet 261). The buy-to-let guide covers how a rental is financed and taxed.
9. When a financing expert can help
Whether a KfW loan is worth it turns on the day's rates, the bank loan it sits next to, and dates that have to line up with the notary. A financing expert checks which programmes your household and the home qualify for, compares lenders that pass KfW loans on, and files the application in time. Have ready your income tax assessments for the second and third years back (or your foreign tax certificates), the listing and the energy certificate, and the notary date if there is one. You can ask for a financing expert who works in English. The mortgage guide for internationals covers what lenders check on the bank loan itself.
Primary sources checked on 30 October 2026: the statute, KfW programme leaflets and pages linked above.