Or you could add a small granny flat as a side structure measuring 6x6m. It doesn’t bother at all and can be used as a hobby room, later for the child or the grandparents.
So this will be a 30 sqm apartment. With a separate entrance and bathroom, there is really enough space to serve as a "hobby room." It will be no more than one room. Especially the grandparents will be happy about such a spacious apartment. Or the hobby room that you can only get to if you leave your house and walk to the extension. In spring, autumn, and winter, in rain, wind, and snow, it’s no fun to go to the home cinema, visit your own gym, or play music. However, the construction costs for this part of the building will be higher than the KfW promotional loan. As you can see, such a funding solution is not necessarily the optimum, to put it mildly and not too negatively.