An agreement has been signed to implement a project providing preferential mortgage loans for internally displaced persons. The program will receive 33 million euros in grant funding.
The agreement formalized the understandings reached during a meeting in the fall of 2025 between Oleksii Kuleba, Deputy Prime Minister for the Reconstruction of Ukraine and Minister of Community and Territorial Development, and Rea Alabali-Radovan, Germany’s Federal Minister for Economic Development and Cooperation. At that time, the parties agreed, in particular, to continue a joint project with the KfW development bank, under which the State Agency for Youth and Housing provides preferential mortgage loans to internally displaced persons.
The document was signed by the International Organization for Migration (IOM) and the State Agency for Youth and Housing with the support of the Ministry of Community and Territorial Development of Ukraine.
The signing ceremony was attended by Oleksii Kuleba, Deputy Prime Minister for the Recovery of Ukraine and Minister of Community and Territorial Development; Heiko Toms, Ambassador of the Federal Republic of Germany to Ukraine; Vitalii Shmeriga, Deputy Head of the KfW Representative Office in Ukraine; and Dejan Keserovic, Deputy Head of the IOM Representative Office in Ukraine.
“We are integrating this new funding into an existing state mechanism that has proven its effectiveness and transparency. Thanks to these funds, as many as 600 IDP families will be able to purchase their own homes on preferential terms as early as this year. Today, we are strengthening the state housing provision instrument for people who were forced to leave due to the temporary occupation of territories, making it more extensive, sustainable, and predictable. “It is important that the program operates on a revolving model: after borrowers repay their loans, the funds do not return to the donor but remain available for further lending to IDP families,” noted Oleksii Kuleba.
Under the terms of the agreement:
€23 million will be allocated for lending to internally displaced persons throughout Ukraine;
up to €10 million may be allocated to communities that have taken in the largest number of displaced persons;
funding will be disbursed in four tranches;
the funds will be revolving in nature—repaid installments will be reinvested into new loans.
The funding is provided as part of a collaboration between the IOM and the KfW Development Bank, which operates with the support of the Government of the Federal Republic of Germany.
Thanks to the new funds, families of internally displaced persons will be able to obtain preferential mortgage loans with terms of up to 30 years at 3% per annum. Borrowers will be selected through an open registry and a random lottery.
The agreement is integrated into the existing state mechanism for preferential lending to IDPs in accordance with Resolution No. 451 of the Cabinet of Ministers of Ukraine. This allows the program to be launched without additional regulatory changes.
Oleksii Kuleba thanked the IOM for its partnership, the Government of the Federal Republic of Germany for its support, as well as the German Embassy in Ukraine and Ambassador Heiko Toms personally for their ongoing attention to Ukraine’s recovery efforts.
In total, thanks to preferential mortgage loans for internally displaced persons, more than 2,400 families of internally displaced persons have already been provided with housing.