Whether renting or buying: finding a suitable apartment is not always easy. There are some households that have it particularly hard, such as large families with low income, people with disabilities or single parents. In order to help these population groups and to make adequate housing possible, the Housing Promotion Act was created.
What is the Housing Assistance Act?
The Housing Promotion Act (WoFG) is a federal law that came into force in 2002 and replaced previous measures. The regulations contained therein are intended to ensure that all those households who would otherwise be disadvantaged in the housing market are also provided with adequate housing. This primarily includes the following groups of people:
- Families with large numbers of children and low or moderate incomes
- Single parent
- People with disabilities
- Seniors
- Other people in need of assistance
Although the Housing Assistance Act is a federal law, individual states are allowed to deviate from its provisions. This way, they can adjust funding requirements to actual regional conditions. The individual federal states often set individual income ceilings that are only roughly based on the Housing Promotion Act.
Housing Subsidy Act: What is subsidized?
The social housing knows different funding approaches. On the one hand, the state promotes the formation of owner-occupied housing by supporting low-income families in the purchase or construction of their own home. On the other hand, he strengthens tenants with the construction of social housing, for which capped rents are envisaged.
Social housing subsidy when buying or building a property
If you belong to the target groups of the Housing Promotion Act, dream of your own four walls and meet all the requirements, then the state will support you in the following projects:
- Building a house or an apartment
- Buying a house or an apartment
- Modernization measures
In the best case, you can look forward to a favorable loan or even subsidies. If government support is an option for you, you should look for subsidy options early on. The following applies: You must apply for the subsidy before buying or purchasing the property.
The subsidy for owner-occupied housing is fed from government pots, which is why only a limited budget is available. What this means for you is that you are not legally entitled to the cash infusion. Whether your application is accepted or rejected depends to a large extent on how much money is still available. If you receive a rejection letter, you can reapply for funding next year.
Upper income limits
Social housing promotion according to the Housing Promotion Act is primarily intended to support low-income households. Therefore, the most important requirement is that you must not exceed applicable income ceilings. The federal limits are defined in Section 9 of the Housing Promotion Act:
- Household with one person: maximum 12.000 € per year
- Household with 2 persons: maximum 18.000 € per year
- Each additional person: additional 4.100 per year
- Each child: additional 500 € per year
If you live in a 3-person household with 2 children, your annual income must not exceed a value of (18.000 euros + 4.100 euros + 2 x 500 euros =) 23.Do not exceed €100. If you earn a little more than that, you should not be deterred and apply anyway. Numerous allowances and deductions ensure that your earnings are reduced on paper. Incidentally, tax-free additional income such as child benefit is not taken into account.
But be careful: although the Housing Promotion Act is a federal law, it is implemented by the states. This also means that they can set individual values. Thus, the maximum income for a 2-person household in Saxony may be as much as 100.000 euros. In Bavaria, on the other hand, with 2 household members you would only be allowed 34.500 euros to qualify for the subsidy.
Other requirements
If you want to apply for social housing subsidies, you must not earn too much money – but not too little either. You must be able to prove that you can afford the loan installments and that you still have enough money left over each month to make ends meet. The state wants to prevent you from falling into the poverty trap due to the real estate loan.
In addition, the state expects you to have saved enough equity for your own home. You will not receive full financing here. Depending on the federal state, you must have an equity ratio of about 15 to 20 percent. In the case of families with 3 or more children, the federal states sometimes deviate from the guidelines and also accept low equity capital. If in doubt, it is worth asking the relevant state bank.
Social housing for affordable rental housing
Not everyone wants to own a home and certainly not everyone can afford it – and that despite subsidies. For this reason, a second component of social housing promotion aims at the development of affordable rental housing – also called social housing.
How does social housing work??
In the case of social housing, the tenants are not directly supported. Instead, the state offers investors and landlords attractive benefits. Recipients of the subsidy often include housing associations, but also individual developers.
The recipient of the subsidy usually receives a loan with preferential conditions. In return, they must commit to renting the apartment or house only to households with a certificate of eligibility for housing (WBS). This is how the so-called occupancy obligation provides for it. In addition, rent control applies to social housing, which means that the landlord may not exceed a maximum rent. Rent increases are also only possible in exceptional cases and under strict conditions.
How do I get social housing?
In order to apply for social housing, you need a Wohnberechtigungsschein (certificate of eligibility for housing). This is available to all households that do not exceed the applicable income limits under Section 9 of the Housing Promotion Act. Here again, however, the individual states can set individual upper limits, which is why you should ask the housing office in your city or municipality directly if in doubt.
If you meet the requirements, you have a legal right to a housing entitlement certificate. Unfortunately, however, this does not necessarily mean that you will actually receive one of the favorable rental apartments. Landlords have a free choice among all WBS applicants and social housing is scarce. The social housing subsidy is often criticized because both occupancy and rent control are only valid for a limited period of time. This means that social housing will not remain social housing forever. This is how the stock of social housing in Germany halved from 1990 to 2016. In metropolitan areas with particularly tight housing markets, the situation is even more problematic. In Berlin, the stock of socially subsidized housing has shrunk by 2 thirds in the last 25 years.
Conclusion: housing assistance law supports low-income households
If you and your family are living on a low income, you should look for government assistance. Especially the financing of adequate housing is essential and helpful for many households. It doesn't matter if you want to build or buy your own home or if you prefer to rent: subsidies are available for both types of housing.