The far-reaching effects of the Federal Constitutional Court's budget ruling also affect the funding programs of the state-run Credit Union for Reconstruction (KfW). In response to this, KfW has temporarily stopped applications and commitments in four residential areas- and construction programs imposed. From now on, no new applications can be submitted in coordination with the Federal Ministry of Construction, and all applications that have already been submitted will no longer be approved for the time being, as the development bank announced on its website.
However, it has been clarified, that promotional loans and investment grants for these programs that have already been promised are not affected by the budget freeze. These programs specifically include that “Renovate according to age”-program, the municipal funding program “Energy-efficient urban renovation”, the promotion of cooperative living and the BMWSB hardship program for housing companies due to increased energy costs.
Furthermore, there is the possibility, that other programs of the development bank are also affected. KfW announced: “We are in contact with all commissioning departments, whether the application- and commitment freeze must also be applied to other programs.” KfW receives funds from various federal ministries for investment grants, Repayment subsidies or interest reductions in bank-directed loan programs. The respective ministries are currently examining, which household titles, which they use for KfW funding, could be affected by the spending freeze, explained the development bank.
The effects of the Federal Constitutional Court ruling on the KfW funding programs are significant and have direct consequences for applications and commitments. The temporary ban affects certain programs, However, uncertainty remains regarding other potentially affected funding measures. KfW and the ministries involved are in intensive contact, to clarify the exact impact on the funding budget. It remains to be seen, how these developments will unfold in the coming weeks and what measures will be taken, to resume funding activities.