7 funding programs the real estate industry should know about
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In addition to conventional financing options, we also turn our attention to the various European and national funding pots from which you could already draw funds today as part of the real estate industry. So today, we would like to give you an overview of seven different programs.
We will also be happy to determine the right program for you within the framework of a funding quick check. We offer this quickly and inexpensively. Please do not hesitate to contact us.
This article reflects the status as of 1 April 2022.
Where can I find funding?
It is often not easy to find funding. The best-known place to go for this is www.foerderdatenbank.de - a service provided by the federal government. The platform is tried and tested, contains the essential grants - and is unfortunately also very confusing.The authors have therefore also founded the platform www.foerdermittelnetzwerk.de. There are extensive overviews of subsidies in various areas and many basic materials on subsidies. In addition, they help companies with the application process. You can register there free of charge.
Who awards grants?
There are many different funding pots for real estate projects. It is essential to consider which funding pot is the most appropriate care. There is, therefore, no such thing as "one funding source." It is crucial to distinguish between the possible sources of funding. The following are potential sources of funding:- The European Union also awards funding directly in so-called "calls." However, these are intended for substantial projects and are considered high-tech projects. Separate from this is the allocation of EU funds, e.g., from the European Regional Development Fund (ERDF), via the member states.
- The federal government itself allocates funding from its budget, for example, via the federal ministries or the KfW. In these cases, the federal government itself is the grantor.
- The federal states also award grants themselves with their programs.
- Finally, cities and municipalities can also award grants themselves in individual cases.
- In rare cases, charitable foundations are also available as grantors, providing appropriate support for special projects, particularly social ones.
Funding programs at federal level
Now let's take a comprehensive look at the federal level - this is where funding comes from federal funds.1. "federal funding for efficient buildings - individual measures (BEG EM)".
If you invest in existing buildings and want to improve the energy level of the building, you may be eligible for the "federal funding for efficient buildings - individual measures (BEG EM)". Details can be found here.Key points:
- The funding provider is the Federal Ministry of Economics and Climate Protection (BMWK).
- Applications for funding can be submitted by private individuals, companies, municipalities, public institutions and associations.
- Funding is granted as a grant of 20 - 50% of the costs of the project; max. EUR 60,000 per residential unit and EUR 1,000 per m² for non-residential buildings; max. EUR 15 million in total.
Funding is available for:
- Individual measures on the building envelope, e.g. insulation or replacement of windows and external doors.
- Plant technology, for example installation of digital systems for optimising energy operation and consumption and energy-efficient interior lighting systems.
- Renewable energies for heating (replacement of oil heating systems, heat pumps)
- Heating optimisation
- Specialist planning and construction supervision
In this respect, necessary environmental measures that are required for the implementation of the measure are also being funded. For example, the removal and disposal of an old heating system. Furthermore, it is not necessary to achieve a new efficiency rating for the building. Both residential and non-residential buildings are eligible for funding.
Note: The "BEG EM" program outlined here is not to be confused with the "Federal Funding for Efficient Buildings (BEG)" promotional program, which is privately administered by the KfW. The latter was temporarily discontinued at the beginning of 2022. Since 22 of February 2022, however, funding from the BEG is possible again. You can find out more here.
For whom is this program suitable? For applicants who are planning or carrying out a sustainable real estate project. The program is particularly important for applicants whose modernisation involves extensive but necessary measures in the surrounding area.
What is wrong with this funding? Funding is only available for measures on existing buildings.
2. "Federal funding for innovative fuel cell heating appliances in buildings"
If you want to install stationary fuel cell systems in your new or existing building, you can receive a grant of up to EUR 34,300 under certain conditions from the program "Federal funding for innovative fuel cell heating appliances in buildings". Details on this program can be found here.The most important key points:
- The funding provider is the Federal Ministry of Economics and Climate Protection (BMWK).
- Funding recipients can be private individuals, companies, municipalities, public institutions, non-profit organisations and associations.
- Applications can be submitted to KfW before the start of the respective measure until 31 December 2022.
- Funding is provided in the form of a grant amounting to a maximum of 40 % of the eligible costs, up to a maximum of EUR 34,300.
Funding is available for:
- Innovative stationary fuel cell systems in residential and non-residential buildings with a power consumption of at least P = 0.25 kWel and a maximum of P = 5.0 kWel.
- Material costs associated with the installation
- Any costs for carrying out the necessary environmental measures
- Installation of the fuel cell heating system and regular maintenance
- Uninstallation and disposal of the old system
The subsidy is made up of a fixed amount of EUR 6,800 (basic subsidy) and an output-dependent amount of EUR 550.50 per 100 watts of electrical output or part thereof (additional subsidy). Both residential and non-residential buildings are eligible.
For whom is this program suitable? For applicants who want to equip their construction project or existing buildings with innovative stationary fuel cell systems.
What are the arguments against this funding? The application process can take time.
3. "IKU - Energetic Urban Redevelopment - Neighbourhood Supply"
If you are planning neighbourhood-related investments to improve energy efficiency, climate protection and adaptation to the consequences of climate change, you should take a closer look at the funding program "IKU – Energetic Urban Redevelopment – Neighbourhood Supply". Details can be found here.The most important data at a glance:
- The funding provider is the Federal Ministry of the Interior and Home Affairs (BMI).
- The funding is addressed to companies and public institutions.
- Applications must be submitted via the applicant's bank or other credit institutions, which forward them to KfW.
- The funding is granted in the form of a loan. 100 % of the eligible costs can be covered; a maximum of EUR 50 million in total. Depending on the type of eligible measure, repayment subsidies of up to 40 % can be granted.
Funding is available for:
- Climate protection projects and adaptation to climate change through green infrastructure (e.g. upgrading and networking of green and open spaces, greening of roofs, facades, streets and squares).
- Climate-friendly mobility in the neighbourhood (e.g. redesigning public street spaces into car-reduced neighbourhoods)
- Heat and cold supply in the neighbourhood (e.g. heat and cold storage across buildings)
- Energy-efficient water supply and wastewater disposal in the neighbourhood.
The respective interest rate is based on the development of the capital market and is bindingly fixed on the day of the commitment. The maximum interest rates applicable in each case can be found here.
For whom is this program suitable? For companies and public institutions with cost-intensive projects that are eligible for funding and are seeking 100% financing rather than just partial financing.
What are the arguments against this funding? The use of other federal funding programs for the same measure is not permitted.
4. "Environmental Protection Grant from the German Environment Foundation"
If you are committed to environmental protection with a project, you can receive a grant from the German Environment Foundation under certain conditions. You can find the detailed program here.The most important facts at a glance:
- The funding body is the German Environment Foundation (GEF).
- Funding is available to companies, educational and research institutions, municipalities, public institutions, private individuals and associations.
- Applications must be submitted directly to the GEF prior to the respective measure.
- Funding is granted as a grant, which varies depending on the project and applicant (SMEs are given preference). As a rule, 50% of the eligible costs are subsidised.
Funding is available for innovative, exemplary and solution-oriented projects in the following topic areas listed in overview:
- Energy-saving neighbourhood development and renewal, climate- and resource-saving building.
- Instruments and competences for sustainability assessment and strengthening of sustainability awareness and action
- Renewable energy, energy saving and efficiency
- Sustainable nutrition and sustainable food handling
- Preservation and protection of nationally valuable cultural assets from harmful environmental impacts
Even if your specific project does not belong to any of the above-mentioned funding fields, there is still the possibility of open-topic funding, provided that a high contribution to solving environmental problems is aimed for.
For whom is this program suitable? It is particularly relevant for SMEs, as they are given preferential treatment. In particular, the funding is independent of government programs and can even complement them.
What speaks against this funding? The application process can take time.
5. "Age-appropriate renovation – loan"
If you want to remove barriers for older people in an existing residential building, improve living comfort and improve protection against thieves, you can receive a KfW loan of up to EUR 50,000 per residential unit for the modernisation measures under certain conditions. You can find details here.The most important key data:
- The KfW banking group provides the funding.
- Companies, municipalities, public institutions, private individuals and associations are eligible for promotion.
- Funding is granted in the form of a loan that covers all eligible costs, up to a maximum of EUR 50,000 per housing unit.
Funding is available for measures to reduce barriers:
- Paths to buildings and in the residential environment as well as entrance areas and flat entrances
- Overcoming stairs and steps as well as room partitioning and threshold removal
- Bathroom conversions and measures in sanitary rooms
- Conversions to facilitate orientation, communication and support in everyday life
- Common rooms, multigenerational living and conversion to the "Standard Age-Appropriate House".
The interest rate of the loan is fixed for either the first 5 or 10 years of the loan term. The interest rate applies at the time the application is received by KfW. You can find the current conditions here. Only residential buildings are eligible.
Who is this program suitable for? For applicants planning projects in the eligible areas. The loan enables low-interest and long-term financing of the projects.
What are the arguments against this funding? The application process can take time.
Funding programs at European level
Last but not least, we will look at two programs. One at the European level and one for the federal states of Bremen and Lower Saxony.6. "InvestEU (2021-2027)"
For real estate projects in the field of "Sustainable Infrastructure", the European program "InvestEU (2021-2027)" could be of importance to you. Details on the extensive program can be found here.The most important key data:
- The funding provider is the EU.
- Companies, research institutions, municipalities, public institutions and associations are eligible for funding.
- Funding is provided in the form of a guarantee, loan and warranty; the specific funding and the amount depend on the type of project and the applicant.
Funding is provided for real estate projects in the area of "sustainable infrastructure", including:
- Building renovation projects with a focus on energy savings and interconnections.
- Energy efficiency in line with the 2030 energy policy framework
- Energy, especially energy from renewable sources
- Renewal and maintenance of rail and road infrastructure.
Both residential and non-residential buildings are eligible under these benchmarks.
Who is this program suitable for? For applicants who are planning or implementing a sustainable real estate project.
What speaks against this funding? Projects whose sole purpose is the renovation of existing buildings and their subsequent re-letting or resale and the implementation of new construction projects are unfortunately not eligible.
7. "Grants for integrated rural development (ZILE)".
If you want to implement rural development projects in Lower Saxony or Bremen, you can apply for funding from the European Agricultural Fund for Rural Development (EAFRD) under certain conditions. You can find details here.The most important data at a glance:
- Funding is provided by the EU through the federal states Bremen and Lower Saxony.
- Funding is available to municipalities, public institutions, private individuals, businesses, associations and federations.
- Applications can be submitted by 15th of September each year.
- Funding is provided in the form of a grant of between 25% and 80% of expenditure, depending on the type of project eligible for funding.
You will receive funding for projects in the areas of:
- Village development plans,
- Regional management for the initiation, organisation and implementation support of rural development processes,
- reorganisation of rural land tenure
- land management, climate and environment,
- infrastructure measures
It should be noted that, as a private applicant, you must submit your funding application via the municipality for measures in the areas of village development, rural road construction, basic services, rural tourism and micro-enterprises providing basic services.
For whom is this program suitable? The program is aimed exclusively at applicants who are planning a measure in Bremen or Lower Saxony. In return, a subsidy of up to 80% is quite attractive.
What are the arguments against this funding? The application procedure can take time.