Apartment Building Funding 2026: KfW, State Programmes, Depreciation
For the new build of rental housing in an apartment building, several funding routes are open, from the KfW via state development banks to municipal programmes, supplemented by tax instruments such as depreciation. This guide classifies the programme types qualitatively without quantifying conditions, explains the right sequence of application before the start of construction and shows how funding and depreciation can be combined. Current conditions are named by the KfW. As of 2026.
Short answer: Several funding routes are open for building new rental housing in a multi-family house: the KfW in the field of climate-friendly new construction with a rental segment, programmes run by the state development banks (Landesförderbanken), municipal programmes, as well as tax depreciation. Many programmes require an application before construction begins. The KfW states the specific conditions, because they change. As of 2026.
Which funding programmes are eligible?
Several types of programme are relevant for building new rental housing. At federal level, the KfW funds, among other things, in the field of climate-friendly new construction, which distinguishes between owner-occupied residential property and a rental segment for rented residential buildings. For multi-family houses, the rental segment is usually the relevant one. In addition, the state development banks offer programmes for social and affordable rental housing, and individual municipalities set up their own programmes. From a tax perspective, both the regular and the declining-balance depreciation apply. We do not state specific conditions and programme numbers, because they change.
Types of funding programme for new rental housing – qualitative only, without conditions (as of 2026, current conditions: kfw.de).
| Programme type | Level | Core idea | Conditions |
|---|---|---|---|
| Climate-friendly new build (rental segment) | Federal / KfW | funding for energy-efficient rental buildings | currently at kfw.de |
| Social/affordable housing | State / development bank | tied to rent levels and occupancy | varies by federal state |
| Municipal programmes | Municipality | e.g. densification, target groups | varies by municipality |
| Declining-balance depreciation / § 7b EStG | Tax law | depreciation of the building value | binding: tax advisor |
Current conditions: kfw.de, as of 2026
Interest rates, repayment subsidies (Tilgungszuschüsse) and programme details change on a cut-off-date basis and are deliberately not quantified here. What counts is the current information provided by the KfW and the respective state development bank or municipality.
KfW climate-friendly new construction: the rental segment
In the field of climate-friendly new construction, the KfW funds buildings that meet certain energy and ecological requirements. For rented multi-family houses, the rental segment is usually the relevant one. The funding is tied to defined efficiency and sustainability criteria that the building must demonstrably meet, and is usually granted as a low-interest loan. We do not state specific interest rates, repayment subsidies and programme numbers, because they change. The application is usually submitted before construction begins via the financing bank, with the involvement of an energy-efficiency expert (Energieeffizienz-Expertise).
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Order of application
The order matters, because many programmes require the application to be submitted before the project begins (Vorhabenbeginn). Even the binding conclusion of a construction or supply contract can count as the start of the project. Anyone who starts building too early risks losing their funding entitlement. The funding review therefore belongs at the very start of project planning.
- Plan the project with the desired energy standard and identify programmes.
- For funded loans, involve the energy-efficiency expert early on.
- Submit the application before construction begins via the financing bank or funding body.
- Only award the construction contract and start building after funding approval.
- Check deadlines and the definition of the project start with the funding body.
Apply before construction begins
Numerous programmes require the application before the project begins. Anyone who only applies after construction has started often loses their entitlement. The exact definition of the project start and the application deadlines are set by the respective funding body. What is binding are the current specifications of the KfW or the state development bank, as of 2026.
Combining funding and depreciation (AfA)
In many cases, funding programmes and tax depreciation can be used alongside each other, because they take effect in different ways: funding works through low-interest loans or grants, while depreciation reduces the taxable base. Whether a combination is permissible and worthwhile in a specific project depends on the programme conditions and the tax situation. Some grants reduce the depreciable costs. We present the combination only in outline.
Funding and depreciation interacting – qualitative (as of 2026). Binding: funding body and tax advice.
| Instrument | Effect | Check with |
|---|---|---|
| KfW loan | low-interest financing | financing bank, kfw.de |
| State grant | direct grant, possibly with conditions attached | state development bank |
| Declining-balance depreciation | higher depreciation in the early years | tax advice |
| Special depreciation § 7b EStG | additional depreciation for rental housing | tax advice |
Whether higher construction standards pay off despite the additional costs depends on the funding incentive, the energy costs saved and the overall economic viability. A blanket statement is not possible. A broader overview of funding routes is provided by the page on funding at a glance. The property type and its standards are covered by the page on the multi-family house as a prefabricated house .
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