House financing KfW 300 & 124 - please provide an assessment

Hello everyone,

I ask for your assessment. This is a personal construction project (solid house) and the KfW 300 & 124 funding programs. In our case, an application is possible at the earliest from May 2025. The question is whether this project is realistically feasible under the given conditions. I hope I have provided all relevant information. Thank you very much for the assessment.

General information about you:

Who are you? M(30) & F(27) The 1st child from May-25

[*]M: German, engineer in the public service Tvöd EG11 level 2 (from July level 3) full-time - the applicant for the financing
[*]F: Turkish citizen with a residence permit of 3 years, SPA, currently unemployed, new in GER, naturalization in about 2 years

Income and asset situation:

[*]What income do you have (gross/net)?
[*]M: 3,300 € net (including Christmas bonus, LOB etc.), from July + 200 € due to level increase + at least 150 € after tariff negotiations (hopefully still this year)
[*]from May + 255 € child benefit
[*]F: from May + 300 € parental allowance for 1 year
[*]How much equity do you have? 18,627 €
[*]How much equity do you want to invest in the house project? All of it.

Housing costs: 820 €

[*]current rent: 520 € cold rent + 200 €, cold rent will no longer apply later
[*]Electricity: 50 €
[*]Phone, Internet, mobile: 50 €

Mobility costs: 75 €

Insurance costs: 40

Living costs & others: 700 €

Total income and expenses from May or possibly July 25:

[*]Total income: 3,300 € + 200 € + 255 € = 3,755 € (without parental allowance, without tariff increase)
[*]Total expenses: 200 € + 50 € + 50 € + 75 € + 40 € + 700 € = 1,115 € (lower heating costs etc. were not considered)
[*]Balance: 2,640 €

General information about the property:

A plot of land under consideration, a cost estimate from a solid house manufacturer (concrete offer will be available next week).

[*]How big is the plot? approx. 550 m2
[*]What is the floor value? 200 € / m2

Construction or purchase costs:

[*]Plot costs: 110,000 € + 11,627 € additional costs = 111,627 €
[*]Construction or purchase costs (incl. architect, structural engineer): 270,000 €
[*]Additional construction costs (e.g., house connections, soil expert, construction power etc.) 19,000 €
[*]Outdoor facilities/terrace, paths, garden design, fences etc.: 5,000 €
[*]Kitchen costs: 5,000 €
[*]Total costs: 410,627 €

deductible equity: 18,627 €

Financing amount: 392,000 €

Necessary loan details:

Annuity loan. Nominal interest rate.

[*]KfW 124: promotional loan 100,000 € with an interest rate of 3.56 % (10 years fixed interest, 25 years term)
[*]KfW 300: promotional loan 170,000 € with an interest rate of 1.41 % (10 years fixed interest, 25 years term) or possibly 2.72 % for 20 years fixed interest. (As long as interest rates remain below 5 % after 10 years, this option would make no sense)
[*]3rd bank: 122,000 € with an interest rate of approx. 4 % (10 years fixed interest, 25 years term), no offer available, only estimate.

According to my calculations, the monthly installment should be 1,609 €. Remaining debt after 25 years would be approx. 85,000 €

Fictive total term until full repayment: theoretically possible within 25 years, due to special repayment.

If the project is realistic, could the plot be financed now and then construction started?

The following is well-intentioned but without any leniency. I am ripping off the bandage directly:

Leave it alone. You practically have no equity, the burden would already be (without any surprises/ additional costs) at 40% of the modest household net income.
The construction costs realistically only suffice for a 90m² house (I suspect a catalog low price for a 120m² house was assumed here).

Look for a used apartment, which fits within your budget, a new single-family house is several leagues too big for your circumstances...

Thank you very much for the feedback. I do not want to buy a house or an apartment from the 50s for €300,000. I forgot to mention: If my car is sold, then I would have +€19,000 more equity, so approximately €40,000.

3rd bank: ... no offer is available, only an estimate.

You won’t get that either. The income is too low, equity as well.

Total expenses: €200 + €50 + €50 + €75 + €40 + €700 = €1,115 (lower heating costs etc. were not considered)

Those numbers are not all?! There are many more costs. Take a look here: Children are expensive, diapers and so on. You are underinsured. No reserves are planned at all. Everything is just scraping by. I suggest a household budget book that is kept meticulously. What about your wife? She won’t work with the child at first?! What is planned there? Does she have an education? …… Your calculation for the new building includes figures from 15 years ago. Which house provider builds you something for €270,000? What does the construction service description include, what must be borne by the client? I think either you have not informed yourself enough or not all costs have been disclosed to you.

forgot to mention: If my car is sold, then I would have +19,000€ more equity, so about 40,000 approximately.

Sorry, but that is nonsense. Certainly, you need a car when you have a child.
It is not sensible to give up your possessions just to get a financing.
But as an example for car/mobility costs in an incomplete household budget:
Here it is:
Mobility costs:

[*]Monthly ticket for bus and train (also for the children!)
[*]Car loan (or savings rate for a new car)
[*]Insurance
[*]Taxes
[*]Fuel
[*]Repairs
[*]Miscellaneous
[*]Is there a second car, motorcycle, scooter? Please list all points again!

[*]Construction or purchase costs (incl. architect, structural engineer): €270,000
[*]Additional construction costs (e.g. house connections, soil surveyor, construction power, etc.) €19,000

What kind of house will that be? Come on, spill the beans so we can evaluate the "offer."

Aside from that

Annuity loan. Nominal interest rate.

[*]KfW 124: promotional loan €100,000 with an interest rate of 3.56% (10 years fixed interest, 25 years term)
[*]KfW 300: promotional loan €170,000 with an interest rate of 1.41% (10 years fixed interest, 25 years term) or possibly 2.72% for 20 years fixed interest. (as long as interest rates remain below 5% after 10 years, this option would not make sense)
[*]3rd bank: €122,000 with an interest rate of approx. 4% (10 years fixed interest, 25 years term), no offer is available, just an estimate.

According to my calculation, the monthly rate should be €1,609. The remaining debt after 25 years would be approx. €85,000

How are you calculating this? I would come up with a higher rate.

Mathematically still feasible. The bank (us and others) would generally budget €1,900 for living expenses for you. Then you have a good €1,800 left for financing—if it remains at the €1,609.
But I find it insane. A house that is more expensive than calculated (with the costs you mentioned you won’t make it—you have to build KfW 40 with a star) with an income stretched to the limit, where there is (an expensive) child coming into the family.

I wouldn’t want to finance you like that.