Govt set to operationalise Rs 15,000-crore SWAMIH-2 Fund to finish one lakh stalled homes

The government is close to operationalising the SWAMIH-2 Fund, a new Rs 15,000-crore mechanism aimed at providing last-mile financing to complete stalled housing projects, according to PTI sources.

Mandates for the new fund are being finalised and clearance is expected soon, they said. Once launched, the fund is expected to provide relief to nearly one lakh middle-class homebuyers whose investments are stuck, despite them continuing to pay EMIs on their home loans.

For this purpose, the government has earmarked Rs 1,500 crore as seed capital for the Special Window for Affordable and Mid-Income Housing (SWAMIH) Fund in the Budget 2025-26.

Officials said the fund would provide last-mile funding for commercially viable projects and help unlock investment stuck in stressed residential projects across India.

The first iteration of the stress-fund mechanism – SWAMIH Fund-1 – was announced by the Centre in November 2019 to complete stalled housing projects nationwide.

A ‘Special Window’ in the form of an Alternative Investment Fund (AIF) was created to provide priority debt financing.

SBI Ventures was appointed the Investment Manager, while the Sponsor of the fund is the Secretary, Department of Economic Affairs, Ministry of Finance.

Under SWAMIH-1, over 55,000 dwelling units in stressed housing projects have been completed, and the fund aims to deliver another 30,000 units over the next three to four years.

Around Rs 15,530 crore has been raised under this fund so far, focused on providing priority debt financing to stressed, brownfield and RERA-registered residential projects in the affordable and mid-income category.

The fund currently has around 30 investment professionals, with an average industry experience of 15 years.

Because it considers proposals from first-time developers, established developers facing distress, accounts with NPAs, projects involved in litigation and those with customer complaints, SWAMIH has been viewed as a lender of last resort for distressed residential developments.

According to a study by data analytics firm PropEquity, commissioned by SBI Ventures Ltd in 2019, an estimated 1,500 projects with 4.58 lakh housing units were stalled or stressed, requiring Rs 55,000 crore to complete.