KfW funding, KfW loan refinancing? Who has experience?

hello,
I am new here and urgently need help. We started building two years ago. Our developer stopped the construction for 3/4 of a year due to payment difficulties. We have finally been able to move in, with defects and a house that is not yet finished with defects. Everything is a nightmare and not nice at all. Our biggest problem is that the developer cannot provide us with the KFW proof and that it would still need to be reworked by us with effort. We have received the last KFW extension and the developer does not get in touch.
Now my actual question is, what are the consequences if we do not provide the KFW with the proof and is there a possibility to refinance. Prepayment penalties etc., and so on.
I would be glad to receive an answer.

Now my actual question, what are the consequences if we do not submit the proofs to the KfW and is there a possibility to restructure the loan.

1. The - unfortunately unpleasant answers - are provided, among others, by the contracts themselves. Here, for example, the "General Provisions for Investment Loans – Contractual Relationship Between House Bank and Final Borrower, which are part of the KfW financing documents.

In short: Possible extreme legal consequences of non-submission of proof:
** Special termination right of the house bank - with total maturity of the remainder all at once (!)
** substantial interest surcharge - retroactive from disbursement


Excerpt from the mentioned ABI:
***
11. Termination for Good Cause
(1) The house bank is entitled to terminate the loan at any time for good cause in whole or in part for immediate repayment, in particular if
a) the loan was obtained unjustly, b) not used according to its purpose or the final borrower, despite a deadline set by the house bank, has not permitted an examination of the appropriate use of funds (...)

14. Special Provisions for ERP Loans and Loans Refunded or Subsidized from Public Budgets
For ERP loans and loans refunded or subsidized from public budgets, the following special provisions shall apply in addition, unless otherwise specified in the loan agreement: (
(...)
(4) Interest surcharge
The agreed interest rate increases from the day following disbursement to 5 percentage points above the applicable base rate according to § 247 of the German Civil Code (BGB), if and insofar as - the loan was obtained unjustly, - not used according to its purpose, - the final borrower, despite a deadline set by the house bank, has not permitted an examination of the appropriate use of funds or - the final borrower does not use the funds for the specified purpose within 3 months and also does not immediately repay the house bank. If the conditions for granting the loan have changed subsequently or have ceased to apply, the interest rate increases to 5 percentage points above the base rate according to § 247 BGB from the time of the change or cessation. Provided that the interest rate specified in the loan agreement is higher than the base rate plus 5 percentage points, the interest rate stated in the loan agreement shall continue to apply.

***


2. On the general situation and possibly restructuring and concerning point 1: I would urgently seek a conversation with the house bank and, if necessary, the consumer advice center or a lawyer... What does the appointed KfW expert, who was supposed to do the construction supervision, say? Possibly retrofitting can be done to achieve the KfW standard.


3. Google: "Risks with KfW Efficiency House Loans for the Borrower and Liability Risks for the Experts" pdf p. 10 ff

In addition to Otus, who is certainly legally correct.

Talk to the bank about a Plan B. I assume that the additional costs are likely to be significantly higher than the interest advantage of the KFW loan (calculate). Usually, the bank has no major difficulties providing its own funds at the same ranking as the KFW funds. And if the situation is presented like this to KFW, KFW could also not charge an interest premium.

Furthermore, there should be no VFE incurred, as 153 includes a special repayment right (also in full amount).