The “Young Buys Old” funding program, which is intended to help families with low and medium incomes to buy their own home, starts on Tuesday. The state wants to make it easier to buy houses and apartments in need of renovation for personal use through low-interest loans from the KfW development bank. 350 million euros are available for this purpose this year, the Ministry of Construction in Berlin announced.
The program is aimed at families with at least one minor child who have a maximum income of 90,000 euros per year. For each additional child, 10,000 euros are added.
A KfW loan with an interest rate of 1.51 percent (with a term of 35 years and a ten-year interest rate fixation) is available for up to 100,000 euros for one child, up to 125,000 euros for two children and up to 150,000 euros for three or more children. The loan term can be seven to 35 years, and the interest rate fixation can be ten or 20 years.
The buildings must have the – poor – energy efficiency class F, G or H; this is 45 percent of all residential buildings in Germany, as the ministry emphasized. Within four and a half years (54 months), the house or apartment must then reach at least efficiency class 70 EE – this means that a building consumes 70 percent of the energy that a legally defined standard house requires. The “Young Buys Old” program can also be combined with funds from the federal funding for efficient buildings for replacing heating systems and with state funding programs.
Those who receive funding must live in the house or apartment themselves for at least five years; the building must be used for residential purposes for at least ten years in total.
Construction Minister Klara Geywitz (SPD) explained: “With low-interest loans that are significantly lower than what the bank offers, a family with two children can save up to 18,000 euros.” Families could, for example, move back to their old home, renovate an existing house there and at the same time take advantage of other renovation subsidies. “Especially in rural and sparsely populated regions, we can avoid doughnut villages, where the historic buildings in the village center are empty and the people live in new buildings around them.”
The German Environmental Aid (DUH) criticized the funding program as not being an effective way to combat the housing shortage – “behind it lies the dangerous logic of easing the housing market by displacing people to the countryside.” The current housing crisis can only be solved by creating affordable housing in the city.
The Budget Committee of the German Bundestag released the funds for the program at the beginning of August. They come from the climate fund. The DUH also complained that, given the massive cuts in the climate fund, a funding program worth millions was not justifiable.
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