KfW 261 - Use of Funds Period and Start of Repayment

Hello,

we have taken out a KfW 261 loan with two repayment-free years and have not yet drawn any money. In the conditions from KfW it says:

"Please note that the amounts drawn must be fully used for the specified purpose within 12 months (fund utilization period). In case this period is exceeded, the borrower has to pay an interest surcharge."

Our bank advisor was not aware of this "fund utilization period." He believes that it is only checked whether the money was used according to the program within 54 months (proven by the "confirmation after completion"). Can you say something about this?

Furthermore, I have not found any clear information about the start of repayment in the contract documents. We agreed on two repayment-free years. Do these two years apply from the signing of the loan agreement or from the full disbursement of the loan?

Many thanks!

Our bank advisor was not aware of this "funds usage period." He says that it is only checked whether the money was used according to the program within 54 months (proven by the "confirmation after implementation"). Can you say something about this?

Yes, your bank advisor’s first career must have been as a butcher… Already on the homepage, the following is written in the information sheet regarding the conditions (but it’s the same for other programs as well).

Furthermore, I did not find any clear information about the start of repayment in the contract documents. We agreed on two repayment-free years. Do these two years apply from the signing of the loan agreement or from the full disbursement of the loan?

It should be in the documents though. It means from the full disbursement.

Such things should be known by your bank advisor.
They are also stated in the loan agreement.
Commitment interest for amounts not drawn down becomes due one year after the date of the commitment by the KfW.
We have a repayment-free year. The start of repayment for us is 1 year (13 months) after signing the loan agreement.

Thank you for your answers. Yes, the text from the KfW was the starting point of my question. And the information from the bank advisor: KfW does not contact the customer directly anyway, and the bank would only be interested that the renovation is completed within the 54 months ... you don’t find much about this "Mitteleinsatzfrist" either.

And the information from the bank advisor: KfW does not contact the customer directly anyway, and the bank would only be interested that the renovation is completed within 54 months

Well, the full credit risk with all that entails lies with the bank, not KfW. He should know how to handle loans from his employer.

Thank you for your answers. Yes, the text from the KfW was the starting point of my question. And the information from the bank advisor: KfW does not contact the customer directly anyway, and the bank would only be interested in the renovation being completed within the 54 months ... you won’t find much about this "Mitteleinsatzfrist".

Our loan agreement explicitly states that the Mitteleinsatzfrist is 54 months and can be extended to 66 months upon request. Likewise, the drawdown period automatically extends by up to 24 months after 12 months without a separate application. I understand the excerpt you shared to mean that for drawn amounts, the usage must be proven within 12 months. That makes sense and should not be a problem if you have the money paid out in partial amounts according to the construction progress.