Families who buy a house in need of renovation can now hope for money from the state. Federal Minister of Construction Klara Geywitz has given the starting signal for the federal government’s long-announced “Young Buys Old” program. It is intended to appeal to families with middle and low incomes who want to fulfill their dream of owning their own home.
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Unlike previous programs, this is only about buying an existing house or apartment. “Through low-interest loans that are significantly lower than what the bank offers, a family with two children can save up to 18,000 euros,” said the SPD politician, according to a statement from her ministry.
What is supported
The purchase of a property that has a building energy certificate of classes F, G or H at the time of application, i.e. has a comparatively high energy consumption, is subsidized. Anyone who wants to receive the subsidy must renovate the property within 4.5 years in an energy-efficient manner – in such a way that after the work is completed it meets at least the requirements of energy efficiency class 70 EE. Such a building may only use 70 percent of the energy of a standard new building and must also obtain 65 percent of its heat energy from renewable sources.
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Those who meet these requirements should be able to take advantage of low-interest loans from the state development bank KfW. According to the ministry, the initial interest rate for a loan term of 35 years and a fixed interest rate of ten years is 1.51 percent effective.
At least one child must live in the household
Both families and single parents can apply for funding. The prerequisite is that there is at least one child under the age of 18 living in the household. Anyone expecting their first child will have to be patient: there is no funding for babies born after the application has been submitted. Since the program is intended for people with low and middle incomes, there are income limits.
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The annual taxable household income of a family with one child may not exceed 90,000 euros. For each additional child, the limit is raised by 10,000 euros. The average income of the year before last and the year before last is used. Anyone applying in 2024 must therefore refer to the average of the years 2022 and 2021.
350 million euros are in the funding pot
The number of children is also a decisive factor in the maximum loan amount: for one child, up to 100,000 euros is possible, for two children 125,000 euros, for three or more children 150,000 euros. It should be remembered that the property purchased can be the only residential property in Germany. It must be lived in by the owner – so holiday homes are taboo. Anyone who has already received funding from the KfW programs 424, 300 or 308 – for example the Baukindergeld – is also excluded.
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The Federal Ministry of Construction is providing 350 million euros this year. It is unclear when the funding pot will be empty. Alexander Müller, co-founder of the energy consulting company “Enter”, points out that this can sometimes happen quickly – even if no blanket statements can be made. “Unfortunately, experience has shown that the pots and programs can be adjusted or terminated at extremely short notice,” he says. At the same time, he has not yet noticed a “run” on the program and customer inquiries are manageable.
1.9 million apartments are empty
Geywitz hopes that the new funding will not only make it easier for families to buy their own home, but will also do something to combat the vacancy rate in the country. According to the 2022 census, 1.9 million apartments in Germany are vacant – 4.3 percent of all apartments. In some regions, especially in eastern Germany and in rural areas, the vacancy rate is significantly higher, reaching the highest level in Germany at 14.6 percent in Altenburger Land (Thuringia).
The funding would enable families to “move back to their old home, renovate an existing house there and at the same time take advantage of other renovation funding,” explained the Minister of Construction. “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 living around them live in new buildings.”
Real Estate Association: Income limits must be removed
The real estate association IVD is more skeptical. President Dirk Wohltorf welcomed the fact that the project announced at the 2023 housing summit is now being put into action. However, the same mistakes as with the new construction subsidy “home ownership for families” are being repeated: “The income limits and low-interest subsidized loans are far too low to be able to meet the very high requirements for energy efficiency,” he criticized. He called for the income limits to be dispensed with. “The main thing is that old houses are made more energy efficient and property is created.”
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Left Party politician Caren Lay also criticized the program. “The program is very small, and only a few will benefit from it,” she told the RND. Shared apartments or families without children are excluded and the housing crisis in the cities will not be alleviated. “The traffic light government is relying on small symbols instead of big effects,” said the Left Party’s housing policy spokeswoman in the Bundestag. Instead, she believes that a nationwide rent cap “and subsidies for real non-profit housing” would be helpful.
