KfW loan solo with equity - Experiences

Hello! We are carrying out a complete renovation of an old building (1975) to EH 70 EE. According to the (allegedly generous) cost estimate from the architect, the project will cost about €400,000. We want to finance most of it from equity capital, together with the KfW loan 261 in the amount of €150,000. We want to avoid another bank loan. This variant (KfW loan "Standalone") seems quite unusual; many banks initially react with surprise, and I find little information about it on the internet. Does anyone have experience with this? In what order must the capital be used? Is it necessary with a KfW loan, as with a regular bank loan, to first use one’s own equity capital? What happens if the construction project costs less than the estimate, e.g., only €300,000? Then we would leave a large part of the loan unused and would also have to waive a large part of the funding (repayment subsidy), right? How exactly does the approval of the KfW loan proceed? With a regular loan, the bank first wants proof that the equity capital has been used and then transfers funds in increments according to the construction phase. On the KfW website, it sounds like it is more flexible and after approval you can simply draw (partial) amounts. Is that true?

This variant (KfW loan "Standalone") seems quite unusual; many banks are initially surprised by it, and I also find little about it on the internet. Does anyone have experience with it?

Actually a great product for banks. The math is significantly higher than with a regular loan. We do it often. Regarding the other points: Yes, KfW is much more flexible. You can discuss everything with the bank. Everything is possible.

Actually a great product for banks. The math is significantly higher than with a normal loan.
We do it often.

Regarding the other points: Yes, KfW is significantly more flexible. You can discuss everything with the bank. Everything is possible.

And then with this excellent loan-to-value ratio. It’s actually a typical case for a local house bank.

In the meantime, we have found a financing partner, but it was not easy. VR Bank and Sparkasse from our current place of residence have "declined," i.e. simply did not get back to us or claimed they wouldn't have an appointment for another two months. The VR Bank at the new place of residence declined directly and honestly. The Sparkasse at the new place of residence, on the other hand, is happy to do it. Through credit brokers, there was still the option to carry it out with BHW or DSL Bank. Both now belong to Deutsche Bank, and since their IT overhaul you should definitely avoid them. And then there is also the Allianz as a nationwide partner. As a bonus, they even offer an interest rate reduced by 0.2%.

In the end, we decided on the Sparkasse because we have a direct and clear contact person on site there and the risk that the applications get lost in a call center is lower.

I will report on the exact process and our experiences at a later time.