Housing development investment support for local governments



The housing development investment support is meant to allow local governments to erect new buildings with rental units or renovating existing buildings for that purpose. The goal of granting the support is to ensure that mobile workers enjoy better access to the residential rental market and to promote investments into establishing residential space for the population.

We will open a new call for proposals in January 2023, at the latest. The terms of the new round will, for the most part, remain the same. The volume of funds for the new call for proposals is EUR 5 million.


  • Contemporary living conditions
  • Improved public space

For who?


local municipality

Important conditions

  • Support is provided for comprehensive projects for construction of new rental properties or renovation of buildings that will enter use or are already in use as rental properties. The residential units to be constructed must meet the requirements applicable to residential space established on the basis of subsection 11 (4) of the Building Code. New buildings must achieve energy performance class A while renovations must meet at least class C. The energy performance class requirement does not apply to the renovation of buildings that are under heritage protection or located in a built-up area of cultural and environmental value.
  • To order the works necessary for carrying out the project, the applicant must, in conformity with the Public Procurement Act, hold a procurement through the public procurement register. A standard example of terms of reference for a public procurement will be prepared by KredEx and published on its website prior to the call for applications.
  • Users must be guaranteed the possibility of renting residential units in the rental property on transparent, objective and non-discriminatory grounds. It is not permitted to sublet residential units.
  • The rent for units in the building to be constructed or renovated will be established by the local government unit. The rent must correspond to market price. The rent may not be lower than the rent for an equivalent apartment in the given district. Calculations may be based on the expense method. For specific socio-economic target groups, the price class may be lower than the rent for an equivalent apartment in the given district.
  • It is prohibited to sell apartment property located in the rental building within 20 years of construction in the case of a newly built a rental property, and within 15 years of the renovation in the case of a renovated rental property. It is prohibited to mortgage apartment property located in the rental building unless the mortgage is established to secure a bank loan taken for the construction or renovation of the building.

Application process

  • power of attorney if a person with the right of representation is acting on the basis of an authorization;
  • confirmation from the applicant regarding the existence of self-financing;
  • decision of the applicant regarding the renovation of an existing apartment building or construction of a new rental building;
  • in the case of a rental building to be constructed, an extract from the land register regarding ownership status of the registered immovable if these data are not available from the land register;
  • in the case of an apartment building to be renovated as a rental property, extract regarding ownership status of the apartment units if these data are not available from the land register;
  • the applicant’s development plan or budget strategy, on the basis of which is possible to evaluate the conformity of the planned investment to the strategic objectives of the development plan, or a link if the corresponding information has been posted on the applicant’s website;
  • description of the spatial influence of the rental property on the surrounding environment;
  • Economic analysis of the investment (mobile employee target group);
  • Economic analysis of the investment (socioeconomically vulnerable target group);
  • In the case of the mobile workforce target group, investment cost-benefit analysis;
  • preliminary building design project for rental building;
  • In the case of local government units set to merge, decisions of the municipality councils confirming consent for carrying out the project.

Contact us

Kristo Hütt

Kristo Hütt

Client Manager

kristo.hutt [at] kredex.ee