KfW Launches Funding Programme for Commercial to Residential Conversions
The German Federal Ministry for Housing and KfW have launched a new funding programme to encourage the conversion of vacant commercial properties into residential units. The programme offers grants of up to EUR 30,000 per new unit.
Berlin – The Federal Ministry for Housing, Urban Development and Building, in cooperation with KfW (the German Development Bank), has launched a new funding programme titled 'Commercial to Residential'. Effective July 1, 2026, the initiative aims to support the conversion of unused commercial spaces into housing, provided energy efficiency improvements are made.
The programme offers grants of up to EUR 30,000 per new residential unit. Funding is provided by the federal government, and applications are submitted directly to KfW. This initiative seeks to address the shortage of housing, particularly in urban areas, by creating new living spaces and revitalizing city centres.
Melanie Kehr, Member of the Executive Board responsible for domestic promotion at KfW, stated the programme's dual benefit: "In many German city centres, there's a paradox: vacant offices and abandoned retail premises on one hand, and a massive need for living space on the other. With this programme, we aim to actively promote the conversion of former commercial sites into housing, fostering liveable neighbourhoods and climate-conscious urban development."
Eligible conversion measures include structural adaptations, floor plan modifications, and interior fit-outs for residential use. Newly created residential units must meet at least the 'Efficiency House 85 Renewable Energies' (EH 85 EE) energy efficiency standard. Exemptions apply for listed buildings. Applicants have 54 months from project approval to completion, with payments disbursed after successful verification of costs and energy standards.