The KfW 261 scheme offers a subsidised loan of up to €150,000 per residential unit for the complete renovation of a property to ‘Efficiency House’ standard and can be combined with the heritage building depreciation allowance. As of 21 July 2026, the scheme has undergone a fundamental change: there is a lower repayment subsidy, but the interest rate is lower.
Under the Residential Building Loan 261 scheme, the repayment subsidy has been reduced since 21 July 2026, but the interest rate is lower as a result. The subsidy is tiered: 10 % for EH 40 EE, 5 % for EH 55 EE and EH listed buildings, whilst there is no subsidy for EH 85 EE and EH 70 EE. Funding of up to €150,000 per residential unit is available; applications must be submitted via your main bank before work begins. You can find the original programme details on the KfW website at kfw.de/261.
The KfW 261 scheme provides funding of up to €150,000 per residential unit for the complete refurbishment of a property to ‘Efficiency House’ standard. The application must be submitted via the applicant’s bank before work on the refurbishment begins.
What does KfW 261 fund — and how much? KfW 261 is a subsidised loan for the complete renovation of a property to ‘Efficiency House’ standard: up to €150,000 per residential unit. Following the refurbishment, the property must achieve at least ‘Efficiency House 85’ standard, and the building must be at least five years old at the time of application.
The higher the level achieved, the greater the repayment subsidy — on a sliding scale since 21 July 2026: EH 40 EE 10 %, EH 55 EE and EH listed buildings EE 5 %; for EH 85 EE and EH 70 EE, the subsidy does not apply. Only the low-interest loan remains. Funding from the federal and state governments.
When and where should the application be submitted? Before the renovation work begins — any application submitted after the work has started will be rejected. The application must always be submitted via the bank providing the finance; it must never be submitted directly to KfW.
Can be combined with many state funding schemes (IBB, SAB, NRW.BANK, L-Bank …) and with the §7i depreciation allowance for listed buildings. Cannot be combined with the individual BEG measures (BAFA or KfW 458) for the same project. During the free initial consultation, we coordinate the order in which applications are submitted and the relevant deadlines to ensure that no funding is forfeited. Funding is available from both the federal and state governments.
What does the KfW 261 scheme fund — and what has changed as of 21 July 2026? KfW 261 provides funding for comprehensive energy-efficiency refurbishment to achieve ‘Efficiency House’ standard, in the form of a low-interest promotional loan per residential unit plus a repayment grant; since 21 July 2026, the repayment grant has been reduced, but the interest rate is lower.
The amount of the repayment grant depends on the ‘Efficiency House’ rating achieved: the higher the rating, the greater the grant. Bonuses are available for ‘worst-performing buildings’ and for serial refurbishment. The level achieved is confirmed by an energy efficiency expert.
As of 21 July 2026, the funding arrangements have changed significantly: there is a lower capital repayment subsidy, but in return a more favourable interest rate. That may sound neutral, but it isn’t — the capital repayment subsidy replaces equity, whilst the favourable interest rate merely reduces the monthly instalment. If the subsidy is withdrawn, the outstanding debt at the end of the fixed-rate period will be higher than the bank had previously calculated.
Anyone carrying out refurbishment work now must factor this deferral into their debt service calculations, rather than simply comparing the nominal interest rates (Nominalzins). That is precisely what we are calculating.
Important: Order of applications. KfW funding will lapse if the application is submitted after the fact. We ensure that the order of applications is correct — this is the most common and most costly source of error when financing investment properties.
It can be combined with most state funding schemes and, for listed buildings, with the §7i depreciation allowance. The building must be at least five years old and reach at least Efficiency House 85 or the heritage standard.
The combination with state funding provides up to three funding components for a renovation project.
Energy efficiency requirements: Funding is available for any renovation that achieves Efficiency House 85 or better, or the Efficiency House listed-building standard (EH Denkmal); the building must be at least five years old at the time of application. The amount of the repayment grant depends on the Efficiency House standard achieved — and it is precisely this scale that has been reduced as of 21 July 2026 (see box below). The system remains the same: the higher the level, the greater the grant; bonuses are still available for a ‘worst-performing building’ and for serial refurbishment.
Particularly relevant for listed buildings: many listed building refurbishments meet the requirements for KfW 261. The combination of the listed building depreciation allowance under Section 7i + KfW 261 + a bank loan is one of the most tax-efficient models for investors. The application must be submitted before work begins.
Who can apply for KfW 261? Private individuals, businesses and owners’ associations for residential buildings in Germany. Applications are always submitted via the applicant’s own bank — never directly to KfW.
BEG transition as of 21 July 2026. On 8 July 2026, the Federal Government published the key points of the revised Federal Funding for Efficient Buildings (Bundesförderung für effiziente Gebäude, BEG); these have been in force since 21 July 2026. Confirmed by KfW itself: the repayment grants have been reduced by a flat rate of 10 percentage points; the renewable energy class is now standard (the previous 5-point bonus no longer applies), the maximum funding amount is a uniform €150,000 per residential unit; in return, the interest rate is reduced more significantly.
The EE class is now compulsory. The new repayment subsidy scale for each level: EH 40 EE 10 %, EH 55 EE and EH listed building EE 5 % — for EH 85 EE and EH 70 EE, the repayment subsidy does not apply (the low-interest loan remains in place).
On top of that: +5 points for the NH class, +10 points for a ‘worst-performing building’ (EH 70/55/40 EE), a serial refurbishment bonus of 15 points for EH 55/40 EE or 5 points for EH 70 EE (from September 2026). Another new development is that comprehensive refurbishment (KfW 261 / BEG WG) and individual measures (BAFA / KfW 458) can no longer be combined for the same project — it is either one or the other.
The rate specified in your KfW approval is decisive; applications that have already been approved are not affected. Source: BEG Funding Guidelines for Residential Buildings (BEG WG) and Individual Measures (BEG EM), BMWE, valid from 21 July 2026, published on 20 July 2026 on energiewechsel.de; KfW overview page ‘Adjustments 2026’; KfW press release dated 8 July 2026. Checked on 21 September 2026.
If the capital repayment subsidy is withdrawn, the outstanding debt at the end of the fixed-interest period will be higher.
The capital repayment subsidy replaces equity capital; the lower interest rate merely reduces the instalment. Anyone refinancing now should factor this shift into their debt service calculations and not just compare the nominal interest rate.
Funding is available for the complete refurbishment of a property to ‘Efficiency House’ standard, in the form of a subsidised loan of up to €150,000 per residential unit.
Following refurbishment, the building must meet at least Efficiency House 85 standards, and must be at least five years old at the time of application. Since 21 July 2026, the repayment grant has been tiered as follows: EH 40 EE 10 %, EH 55 EE and EH Denkmal EE (listed buildings) 5 %; it does not apply to EH 85 EE or EH 70 EE.
| Position | Amount |
|---|---|
| Purchase price | €280,000 |
| Refurbishment costs | €65,000 |
| KfW 261 | €65,000 / ~KfW terms on the date of approval |
| Bank loan for purchase | €240,000 |
| Energy class before/after | H → C |
| Total instalment | ~€1,700 |
| Savings on heating costs | ~€2,400 per year |
Model calculation provided for information purposes only.
| Position | Amount |
|---|---|
| Property value | €240,000 |
| Renovation works | Windows + heat pump |
| Costs | €32,000 |
| KfW 261 | €32,000 / ~KfW terms and conditions on the date of approval |
| KfW instalment | ~€230 per month (10 years) |
| Energy rating before/after | G → E |
Model calculation provided for information purposes only.
Before the refurbishment work begins — any application submitted after this point will be rejected. We coordinate the order in which applications are submitted so that KfW and bank financing are aligned.
Yes — KfW 261 can be combined with many regional funding schemes (IBB Berlin, SAB Saxony, NRW.BANK, etc.). The exact combination depends on the property and the work to be carried out.
That depends on the efficiency-house level you reach after the refurbishment. Since 21 July 2026 the following applies (the EE class is mandatory): EH 40 EE 10 %, EH 55 EE and EH Denkmal EE 5 % — for EH 85 EE and EH 70 EE the repayment grant no longer applies, the reduced-interest loan remains.
On top come +5 points for the NH class, +10 points for a “worst performing building” and the serial refurbishment bonus (15 points EH 55/40 EE, 5 points EH 70 EE from September 2026). What counts is the rate in your KfW commitment, not the one in a table. What we do for you: check the commitment against your calculation before you sign.
Since 21 July 2026, the BEG individual measures (BAFA or KfW 458) and the comprehensive refurbishment scheme under KfW 261 (BEG WG) can no longer be combined for the same project — it is either one or the other. Anyone who applies for funding for their heating system as an individual measure today cannot also use the 261 comprehensive loan for the same renovation, and vice versa. The choice and sequence of measures is therefore a financing decision — and this is precisely what we will work through with you before the first application is submitted.
This is because the capital repayment subsidy replaces equity, whereas the favourable interest rate merely reduces the instalment. If the subsidy is withdrawn, by the end of the fixed-interest period there will be a shortfall in the amount that the bank had previously budgeted as having been repaid — the outstanding debt at the end of the fixed-interest period will increase. A lower interest rate partially offsets this over the term of the loan, but not in the debt service calculation that your bank is using today. It is precisely this shift that we calculate for you.
The KfW 261 scheme was temporarily suspended in July 2026, with amended terms and conditions; new terms have been in force since 21 July 2026. The scheme is still running; please check the status on kfw.de before submitting an application.
The costs eligible under the KfW 261 scheme are the costs of renovation work to achieve ‘Effizienzhaus’ standard, including planning and on-site supervision by energy efficiency experts. The upper limit (Obergrenze) is €150,000 per residential unit.
KfW 262 was the BEG grant for residential buildings and has now expired; today, comprehensive refurbishment is funded through Loan 261. The KfW BEG scheme is the federal funding programme for energy-efficient buildings, which includes Loan 261 and individual measures. You can check the current status of KfW 262 at kfw.de.
Free, no-obligation initial consultation — the commission is usually paid by the bank. We review over 650 banks, plus all regional funding schemes (Landesförderung), to find the best fit for your situation.
This does not constitute legal or tax advice.
Replacing the heating system as a stand-alone measure — an alternative to a full refurbishment.
Which of the eight KfW programmes is generally best suited to your project?
Calculate the instalment, remaining debt and effect of the capital repayment subsidy for KfW 261.
Windows, façade, roof, heating — which of these four measures is still outstanding for your property?
Editorially responsible: Olga Nikushkina — owner, §34i GewO (German mortgage brokerage), adviser register D-W-132-ZUCB-95. Specialised in German property financing with an international dimension: non-residents, foreign-currency income, cross-border workers, expats. Siegfried Perini is entered in the German intermediary register under this licence as a person directly involved in brokerage and advice (§ 11a GewO), active in real estate since 1992. Not legal or tax advice.
