Housing promotion
Performance specification
a) Promotion of owner-occupied housing
For the first-time creation of owner-occupied residential property through the construction of new housing or the acquisition of an existing property, low-interest building loans are provided by the State of Hesse together with Wirtschafts- und Infrastrukturbank Hessen (WIBank) on the basis of the Hessisches Wohnraumförderungsgesetz (HWoFG) of 13 December 2012 as amended on 2 December 2014.
Funding is provided through the following programmes:
- Hesse Loan New Construction
- Hesse Loan Portfolio Acquisition
The subsidies can only be granted under certain conditions, e.g. compliance with cost ceilings, living space ceilings, income limits, load limits, proof of at least 15 % own contribution (of which at least 10 % equity) pp. The loan amount is up to 50 % of the total costs for new construction as well as for the acquisition of existing housing stock, but at least 30,000 € and not more than 90,000 € for new construction and 125,000 € for the acquisition of existing housing stock. The interest rates are approx. 30 % below the capital market level and are fixed for 20 years at an interest rate of 0.60 % / effective interest rate 0.68 %. The repayment is 3% p.a. and the loan term is approx. 32 years. WIBank offers the above conditions with subordinate security of the land charge in the land register.
You can find more information at the following link from WIBank:
New construction of an owner-occupied property
b) Promotion of rental housing
Loans can be applied for from the State of Hesse for the creation of new rental flats in social housing. This promotes the creation of affordable housing. Funding from this programme is used to provide housing for households that are unable to obtain adequate housing on the housing market. Priority is given to measures with the lowest possible energy requirements, in particular buildings constructed in passive house design. Eligible to apply are natural and legal persons who carry out the building project for their own account or for the account of a third party in their own name or have it carried out by a third party (building owner). The subsidy consists of the granting of loans and an additional financing subsidy of 20%, 30% or 40%, depending on the commitment period of 15, 20 or 25 years. The loan amount is calculated on the basis of the living space, the land costs and a possible surcharge for wheelchair-accessible flats. Municipal co-financing of at least € 10,000 per housing unit is required.
Occupancy and rent control
The subsidised flats are subject to occupancy and rent control for a period of 15, 20 or 25 years from the date of completion. They are to be made available only to eligible housing seekers in accordance with the relevant provisions of Land law.
In particular, their income may not exceed the income limits applicable at the time of letting. Proof of eligibility for housing must be provided in the form of a certificate of eligibility for housing, which indicates the relevant flat size.
WIBank link to social rental housing promotion (low income)
WIBank link to social rental housing promotion (middle income)
Download the guideline of the State of Hesse on social rental housing promotion
c) Promotion of the modernisation of rental housing
Loans are available for the modernisation of rented residential buildings that have been ready for occupancy for at least 20 years. The planned modernisation must comprise at least four flats. The subsidised flats are subject to occupancy and rent commitments. After completion of the subsidised modernisation, the flats should, as far as possible, correspond to the current equipment standard of social housing. The loan amount is up to 80% of the eligible costs plus an additional financing subsidy of 20% of the approved subsidised loan. The State of Hesse assumes the interest payable for the duration of the first fixed interest period of 15 years. The repayment rate is usually 2 % for the entire term of the loan.
The modernisation of dwellings through structural measures, in particular the improvement of the dwelling layout, e.g. by combining small dwellings into one large dwelling for large families, is eligible for funding,
of natural lighting and ventilation,
of heating if the projects cannot be financed under KfW's programmes,
energy supply, water supply (consumption reduction, measurement of drinking water consumption),
of the sanitary facilities, drainage and moisture protection,
of sound insulation,
the structural suitability of a dwelling for older people or people with disabilities, and
the immediate surroundings of the residential building (green areas, children's playgrounds).
Priority is given to modernisation with simultaneous implementation of energy measures.
Energy measures that KfW promotes under its programmes are not eligible for funding.
Occupancy commitment
The commitment period is 10 years from the first disbursement of the loan.
In the event of a change of tenant, the flats are to be given to flat seekers whose incomes do not exceed certain income limits. The income limits are currently:
For a one-person household € 16,351,
for a two-person household € 24,807,
plus € 5,639 for each additional person included in the household.
For each child included in the household, the income limit increases by a further € 650 per year.
For the determination of income, §§ 6 and 7 Hess. Housing Promotion Act (HWoFG) shall apply. Proof of entitlement to housing must be provided in the form of a housing entitlement certificate in accordance with § 17 HWoFG.
The rent increase caused by the modernisation is limited to a maximum of € 2.00 per m² of living space and month. No further rent increases are permitted until five years after completion of the modernisation.
d) Promotion of disability-friendly conversion of owner-occupied housing
As part of a state programme, the state of Hesse grants cost subsidies through WIBank for the conversion of housing so that people with disabilities can run their own households and live independently and autonomously. Furthermore, the residential buildings and the flats should be accessible without barriers.
Structural measures, facilities and equipment on and in owner-occupied existing residential buildings and on the residential property are funded with cost subsidies. The funding is project funding. It takes the form of fixed-amount financing. The subsidy amounts to up to 50 % of the measure-related conversion costs of the dwelling used by the owner or relatives. Measures costing less than € 1,000 are not eligible for funding. The following maximum grant amounts apply to eligible measures: Bathroom: conversion/installation € 5,000, kitchen: conversion/installation € 5,000, lift/ lift installation € 6,000, all other eligible individual measures € 2,500.
Important: We would like to point out that only a limited amount of funding is available each year and, as a matter of principle, only those measures can be funded that are not started until a funding commitment has been received from WIBank.
For more information and to download the application forms, click here