Buying a condominium in major cities like Berlin is still a paying proposition despite recent price hikes. For the time being, interest rates remain on a low level whereas rent rates keep going up steadily. Loan terms are particularly affordable for those home buyers who commit a substantial amount of equity capital. Families, however, often lack the financial wherewithal to do so. Berlin's city government – the Senate – and its subsidy bank IBB therefore created a two-year pilot program that will support families with a comparatively low income to finance their homes. The IBB building loan program for families has now been launched.
Subsidised Loans for Families with Comparatively Low Income
Government sponsorship takes the form of subsidised loans that are usually granted in order to top up loans that families have taken out at their local bank to buy or build a home. But even this program requires a certain amount of equity capital to make the dream of homeownership come true. Families are expected to commit at least 15 percent of the purchase price or the construction costs plus the property price out of their own pockets. Eligible to apply for funding are families and single-raising parents with at least one minor living in the same household. At the same time, a family's net income must not exceed a certain amount. The annual income of a family of three should be 40,680 euros or less, whereas the income limit for a family of four is 48,960 euros.
IBB Building Loans for Families to Cover any Property-Related CostsThe idea underlying the IBB
building loans for families is to keep promoting housing construction in Berlin. The program is meant exclusively to finance the construction of new buildings or the acquisition of a new-build residential property. Eligible for program funding are any costs that may be incurred by buying or building a home – be it to pay for the building land, for the estate agent, or for the land registration. On top of that, building loans for families may principally be combined with other funding options, such as the programs offered by the KfW development bank. In any case, however, qualifying families should remember to file their funding application before they buy a home or start building one.