The Union government is soon to operationalize the SWAMIH-2 Fund, which is a ₹15,000-crore stress resolution fund to finish close to one lakh homes that are currently halted in unfinished residential projects. The fund is estimated to facilitate last-mile funding to those residential projects which have been pending due to funding issues or other reasons, which has resulted in many middle-class individuals waiting to receive their homes while paying their EMI payments.
As per the official reports, the Final Mandate and operational structure for SWAMIH-2 Fund has been worked upon, and once that is completed, the formal approvals will be sought. The SWAMIH-2 Fund is soon to be launched on the basis of learnings and accomplishments achieved under SWAMIH Fund in 2019.
The Union Budget for 2025-26 announced seed capital of ₹1,500 crores for SWAMIH-2. It marked a continued attention and endeavor from the government regarding speeding up stalled housing projects. Once fully operational, this organization would provide loans to those projects that have good viability but do not have finances and would be developed and handed over to home buyers.
The first SWAMIH Fund was introduced in November 2019. It was a special stress fund categorized under an Alternative Investment Fund (AIF). The investment manager entrusted with the responsibility of managing the funds was SBI Ventures. The sponsor of the special stress fund was the Secretary of the Department of Economic Affairs of the Ministry of Finance. The special stress fund was declared as a last resort lender that offered services to projects that had been unable to access funding from banks and financial institutions.
Under the SWAMIH Fund-1, over 55,000 housing units in stressed projects have been completed, while another 30,000 units are expected to be completed in the next three to four years. So far, this fund has managed to raise ₹15,530 crores, which has been invested in brownfield, RERA registered residential projects in the affordable and mid-segment markets.
One of the unique aspects of the SWAMIH framework is that it has very broad eligibility criteria for funding projects. This means that it invests in projects of first-time developers, experienced developers facing stressed assets, projects facing litigation, complaints from customers, and even projects connected to non-performing loans.
In 2019, PropEquity, an analytics company, carried out a study regarding stalled housing projects. The project was commissioned by SBI Ventures. According to this study, there were almost 1,500 housing projects with around 4.58 lakh housing units that were stalled in India. This fund had an average requirement of ₹55,000 crore. Though the SWAMIH Fund-1 was able to fill up some of this gap, there was still a need for further efforts.
The upcoming SWAMIH-2 Fund will greatly benefit the residential property segment by attracting more buyer confidence. It is a relief not just for the homebuyer but also for the entire real estate sector, which has been plagued by sluggish activity and should now see some improvement.
It will allow homebuyers to hope for possession of property after years of uncertainty. Being such an important sector as far as employment and economic activity is concerned, the SWAMIH 2 fund could be extremely helpful for resolving the legacy issues and even more so for ensuring that the interests of homebuyers and the real estate sector.
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