Construction financing - Share of equity and Kfw

Hello everyone,

we would like to buy a property in need of renovation soon and I am now asking myself how to best bring in my equity.

House purchase - €450,000 with Kfw 308 - €125,000
Renovation and modernization costs - €220,000 with Kfw 261 - €160,000
Equity €150,000

Would it make sense to apply to the bank for the renovation costs only up to the amount of the Kfw and then reduce the equity by about €70,000? Then I wouldn't have to submit receipts to the bank and would be more flexible.

Perhaps there is experience whether I should go the Kfw route or rather use the individual funding measures from Bafa?

I would appreciate any assistance.

Best regards

Would it make sense to apply to the bank for the renovation costs only up to the amount of the KfW and then reduce the equity by the 70,000€? Then I wouldn’t have to submit receipts to the bank and would be more flexible.

,,, and the bank will, in doubt, value the house lower and you will get worse conditions.

Would it make sense to apply to the bank for the renovation costs only up to the amount of the KfW and then reduce the equity by the 70,000€? Then I wouldn’t have to submit receipts to the bank and would be more flexible.

Since the equity is used anyway for the proportional payment of the purchase price (equity is almost always required upfront at 99%), the topic is irrelevant. You also need the receipts for the KfW financing, which the bank reviews. Besides, it would be foolish if the expert for the KfW application lists costs of 220k and you tell the bank that you don’t have enough equity for the overall measure – then there would be no financing at all. This could happen if: - total costs are 670k - you apply for 285k KfW - you contribute or show the bank 80k equity - you apply for 235k bank loan ==> total 600k The bank will have two answers. 1. You need 305k bank loan or 2. You must contribute 70k more equity to the financing.