Govt to launch SWAMIH-2 fund soon, aims to complete 1 lakh homes in stalled projects

The central government is set to finalise the framework and features of the SWAMIH-2 Fund and launch it soon to provide last-mile financing for the completion of stalled housing projects, a PTI report said, citing sources.

The launch of the ₹15,000-crore fund would offer relief to as many as one lakh middle-class homebuyers whose investments are currently stuck even after they have paid their EMI (equated monthly instalments) on loans taken for apartments.

To solve this, the government earmarked ₹1,500 crore as a seed capital for the Special Window for Affordable and Mid-Income Housing (SWAMIH) Fund in the Budget 2025-26.

The mandates for the fund are being finalised, and clearance would be granted soon, sources said, as per the PTI report. The new fund would provide last-mile funding for commercially viable projects and unlock investment in stalled residential projects, it added. 

What is SWAMIH?

The centre launched a stress fund, called SWAMIH, in November 2019, to complete pending housing projects across India. A 'Special Window' in the form of an Alternative Investment Fund (AIF) was created to provide priority debt financing for the completion of stalled housing projects. 

SBI Ventures was assigned the role of Investment Manager for this special window. The Sponsor of the Fund is the Secretary, Department of Economic Affairs, Ministry of Finance.

More than 55,000 dwelling units in stressed housing projects have been completed under the SWAMIH Fund-1, and it aims to deliver another 30,000 homes over the next 3-4 years.

Currently, the Fund has about 30 investment professionals, with an average of 15 years of industry experience.

So far, ₹15,530 crore has been raised under the fund aimed at providing priority debt financing for the completion of stressed, brownfield and Real Estate Regulatory Authority (RERA) registered residential projects that fall in the affordable, mid-income housing category.

The fund is considered the lender of last resort for distressed properties, as it considers first-time developers, established developers with troubled projects, developers with a poor track record of stalled projects, customer complaints and NPA accounts and even projects with litigation issues. 

SBI Ventures commissioned data analytics firm PropEquity in 2019, which estimated that nearly 1,500 projects with 4.58 lakh housing units were stalled/stressed, requiring a total funding of ₹55,000 crore to complete these stalled projects.