KfW 261&359, Time Pressure & Psyche

Hello everyone,

I hope I'm posting in the right thread, I am completely new here and actually only registered for this post.

Here is our situation:
In December 2022, we took out two KfW loans 261 to renovate an old house. Now we are taking out an additional loan 359 because the money is not enough. Actually, you have two years to complete the renovation, but if you are not finished by then, it's quite simple to extend the deadline by six months. However, this can only be done a maximum of four times. This means that although we should have been finished with everything by December 2024, we can extend until December 2026. However, we underestimated the renovation, with a lot of personal work, the architect suddenly no longer has time for construction management so I am doing everything now (unfortunately we never actually had a contract) and unfortunately the weather (snow and rain) has already disrupted our plans twice, putting the construction site on hold for a total of 7 months. That’s the situation.

Now to my problem: At the end of 2024, I had to take six weeks off sick due to a stress disorder with panic attacks, and my mental health is suffering tremendously from the stress we all know, especially from the pressure to complete all the energy-related renovation measures by the mentioned deadline.

Sure, one could say that we should have seen this coming and that we naively took on too much. But what can I say – if I had known, we wouldn't have done it this way.

I now have the following questions:

- What happens if we are not finished by the deadline? Will KfW then demand the full repayment of the loan? Or will we “only” lose the repayment subsidy? For us, that would be around €50,000!!
- Is there a possibility to submit a kind of hardship application at KfW, or at the house bank, to extend the deadline by, for example, an additional twelve months?

I am currently feeling so bad mentally again that I fear that I might have to go to a clinic and completely burn out. Or otherwise have to give up the project, which would probably result in at least a personal insolvency or something similar.

Maybe someone has experience with how KfW responds to such a request and can give us tips. We would be very grateful for that!!

Best regards
Eddy

- What happens if we don’t finish by the deadline? Will KfW demand the full loan back? Or will we “only” lose the repayment grant? That would be around €50,000 for us!!

That is individual. Normally, you don’t get another extension, the repayment grant is lost and then there is a) reversal of the contract or b) conversion into a regular loan (high interest).

You still have almost two (!!!) years. Don’t let it get you down. Are you doing everything alone or are there also craftsmen? If necessary (if possible) finance a bit more and get craftsmen moving through the house. After all, other costs are certainly running in parallel, which you could reduce with a quick move.

P.S. I can understand the stress; I myself did a full renovation with my own work.

That is individual. Normally, you don't get another extension, the repayment grant is lost, and then there is a) reversal or b) conversion into a normal loan (high interest rates).

You still have almost two (!!!) years. Don't let it get you down. Are you doing everything alone or are there also craftsmen? If in doubt (if possible) finance a little more and send craftsmen through the house. After all, there are certainly ongoing costs in parallel that you could reduce with a quick move.

P.S. I can relate to the stress, I am doing a complete renovation myself.

Thank you for your message. Honestly, that still helps me a lot because I no longer have any uncertainty but finally know what would happen if it doesn't work out. That would be really crappy but of course not the end of the world.
And yes, as you already said, on good days I am also optimistic but sometimes it all seems impossible. Fortunately, we also have craftsmen, but to stay within the financial limits we have to do 80% ourselves.
Thanks for your assessment!

.....if it doesn’t work out. That would really suck but of course it’s not the end of the world.

In this context, I would seriously examine and consider, instead of possibly refinancing as mentioned before, doing it now within a feasible range and getting unpleasant burdens off my back. Of course, one wants/should save or manage the money as best as possible and borrow as little as possible from the bank, but health cannot be regained and if in the end it still isn’t enough, the disappointment would come on top.
That would ease the current pressure a bit and show a bit more light at the end of the tunnel. However, I don’t know your overall situation, maybe you could explain it so that ideas can be found here, because in such a "state" one is sometimes also mentally stuck.