(1) The Federal Institute may, by way of a general order, determine for credit institutions that conduct the lending business the restrictions provided for in subsection (2) on the granting of loans for the construction or acquisition of residential immovable property located domestically, where and insofar as this is necessary to counteract a disruption to the functioning of the domestic financial system or a threat to financial stability domestically. A disruption to the functioning of the financial system or a threat to financial stability may, in particular, be imminent where the prices of residential immovable property, and the volume of new loans granted for the construction or acquisition of residential immovable property, rise sharply, and the ratios named in subsection (2) change significantly in the granting of loans. The granting of loans is exempt from restrictions 1. for the extension, conversion, or renovation of residential immovable property owned by the borrower, 2. for measures for which social housing promotion within the meaning of the Housing Promotion Act, or under corresponding Land-law provisions, has been committed, 3. for projects for which loans were already granted to the same borrower before restrictions under the first sentence were determined, insofar as their total amount does not exceed the amount, after repayments, of the loans granted before the restrictions were determined (follow-up financing), and 4. for the rescheduling and restructuring of non-performing loans. More detailed provisions may be made in the general order under the first sentence concerning the loans exempted from restrictions under the third sentence. The Federal Institute may permit further exemptions.
(2) The granting of loans may be restricted by 1. setting an upper limit for the ratio of the total volume of debt capital in a property financing to the market value of the residential immovable property at the time the loan is granted (loan-to-value ratio), and 2. setting a period within which a particular fraction of a loan must be repaid at the latest, or, for bullet loans, setting a maximum term (amortisation requirement). The restrictions may be determined individually or in combination.
(3) When determining restrictions under subsection (1), first sentence, the Federal Institute simultaneously orders 1. what proportion of a credit institution's new business for residential immovable property financing is not subject to the restrictions determined (free allowance), 2. up to what loan amount one or more restrictions do not apply (de minimis threshold), whereby an upper limit is to be set for the loan volume that may be granted within the de minimis threshold in a particular period, in proportion to a credit institution's total new business for residential immovable property financing in a particular period, 3. up to what mortgage lending value of a residential immovable property one or more restrictions on the granting of the loan for the construction or acquisition of that property do not apply, where the lender's claims arising from the loan are secured by the creation of mortgages or land charges on the property and do not exceed the first 80 percent of the mortgage lending value (lower threshold value), 4. up to what mortgage lending value of a residential immovable property one or more restrictions on the granting of the loan for the construction or acquisition of that property do not apply, where the lender's claims arising from the loan are secured by the creation of mortgages or land charges on the property and do not exceed the first 60 percent of the mortgage lending value (upper threshold value), and 5. from what point in time the restrictions must be observed; an appropriate period after the general order is announced is to be provided for in this regard. The de minimis threshold under the first sentence, point 2, is at least EUR 50,000, the lower threshold value under the first sentence, point 3, is at least EUR 200,000, and the upper threshold value under the first sentence, point 4, is at least EUR 400,000.
(4) The restrictions determined under subsection (1), first sentence, must be reviewed at least every six months.
(5) The Federal Ministry of Finance is authorised, after hearing the institutions' umbrella associations, to issue, by statutory instrument not requiring the consent of the Bundesrat, in consultation with the Federal Ministry for Economic Affairs and Energy, the Federal Ministry of Justice and Consumer Protection, the Federal Ministry for the Environment, Nature Conservation and Nuclear Safety, and the Deutsche Bundesbank, more detailed provisions on 1. the definitions of the loans and of the residential immovable property under subsection (1), including the exempted loans; 2. the determination of upper limits and periods, the calculation of ratios, and other relevant quantities under subsection (2); 3. the order concerning the free allowance, the de minimis threshold, the threshold values, and the point in time from which the restrictions must be observed, under subsection (3); 4. the regular review of restrictions determined under subsection (4); 5. details of the cooperation between the Federal Institute and the Deutsche Bundesbank in applying this provision.
(6) Before issuing a general order under subsection (1), the umbrella associations of the institutions, including the building societies, and of the real estate industry, and the Federal Ministry for Economic Affairs and Energy, the Federal Ministry of Justice and Consumer Protection, and the Federal Ministry for the Environment, Nature Conservation and Nuclear Safety, are to be heard. The Federal Ministry of Finance informs the Finance Committee of the German Bundestag, without delay, of the commencement of the hearing under the first sentence; the general order is issued no earlier than six weeks after this notification. The Federal Institute notifies the European Commission, the Council, the European Systemic Risk Board, the European Central Bank, and the European Banking Authority of its intention to issue a general order under subsection (1). The first to third sentences apply correspondingly to an amendment of the general order intended to determine additional or more extensive restrictions.
(7) The Federal Institute may recognise restrictions determined in another state of the European Economic Area or in a third country on the granting of loans for the construction or acquisition of residential immovable property located in another state. Recognition requires that the foreign restrictions are comparable to the restrictions possible under subsection (2). Subsections (1) to (4) apply correspondingly.
5.
Enforceability, coercive measures, levy, and costs