Introduction
- The Indian real estate sector, particularly the affordable and mid-income housing segment, has faced significant challenges over the past decade.
- Many housing projects across the country remain stalled due to financial constraints, leaving millions of homebuyers in distress.
- To address this issue, the government launched the Special Window for Affordable and Mid-Income Housing (SWAMIH) Investment Fund in 2019.
- Building on the success of SWAMIH Fund 1.0, the government has now introduced SWAMIH Fund 2.0 to provide last-mile financing and ensure the completion of even more stalled housing projects.
Budget ALLOCATION 2025
- The Union Budget 2025 has introduced SWAMIH Fund 2.0, a game-changer for India’s real estate sector! With an additional ₹15,000 crore allocated, this initiative aims to fast-track the completion of stalled affordable and mid-income housing projects, bringing hope to thousands of homebuyers.
What is SWAMIH Fund?
- The Special Window for Affordable and Mid-Income Housing (SWAMIH) Fund is a government-backed “last-mile funding” initiative launched in November 2019.
- It was created to help stalled housing projects reach completion, thereby providing relief to homebuyers who had invested in them.
- The fund is managed by SBICAP Ventures Ltd., a subsidiary of the State Bank of India (SBI).
Key Objectives of SWAMIH Fund:
- Provide financial assistance to stalled real estate projects.
- Ensure the completion of housing projects in the affordable and mid-income segments.
- Boost homebuyer confidence by enabling possession of homes.
- Revive the real estate sector by unlocking liquidity.
The first phase, SWAMIH Fund 1.0, was a ₹25,000 crore fund, with contributions from the government, Life Insurance Corporation (LIC), State Bank of India (SBI), and other financial institutions.
Achievements of SWAMIH Fund 1.0
- ₹35,000+ crore worth of liquidity unlocked.
- 50,000+ housing units completed across India.
- Over 130 projects revived, helping over 1 lakh homebuyers.
- Helped in the revival of real estate-linked industries such as cement, steel, and construction labor.
Following its success, the Union Budget 2025 announced the launch of SWAMIH Fund 2.0 with an increased allocation and a more extensive scope to help more homebuyers.
What is SWAMIH Fund 2.0?
- SWAMIH Fund 2.0 is an enhanced version of the original scheme, with a larger corpus of ₹15,000 crore and an ambitious target to complete another 1 lakh stalled housing units across India.
Key Features of SWAMIH Fund 2.0
- Blended Finance Model:
- The fund will receive investments from the government, banks, NBFCs, and private investors to create a diversified funding pool.
- Targeting Affordable & Mid-Income Housing:
- Focuses on projects where the majority of units are priced below ₹2 crore in Mumbai, ₹1.5 crore in NCR, and ₹1 crore in other cities.
- Support for Middle-Class Families:
- Aims to help homebuyers struggling with both EMIs and rent due to project delays.
- Higher Investment Per Project:
- SWAMIH 2.0 is expected to provide more funding per project to ensure completion.
- Faster Implementation:
- The fund will adopt a streamlined process to identify, evaluate, and approve funding for stalled projects within a shorter time frame.
Who Will Benefit from SWAMIH Fund 2.0?
- Stressed Homebuyers:
- Those who have invested in under-construction projects and have been waiting for possession.
- Real Estate Developers:
- Builders facing financial constraints and unable to complete projects due to lack of liquidity.
- Banking Sector & NBFCs:
- Reduced stress on banks and non-banking financial companies (NBFCs) holding bad loans in real estate.
- Construction & Allied Industries:
- Boost for the steel, cement, labor, and other industries linked to real estate.
Expected Impact of SWAMIH Fund 2.0
- Boost Homebuyer Confidence
- By ensuring stalled projects get completed, SWAMIH Fund 2.0 will restore trust in the real estate sector and encourage homebuyers to invest in under-construction properties again.
- Reduce Unsold Inventory
- India has a huge backlog of unsold real estate inventory due to stalled projects. Completing these projects will help bring homes to market, stabilizing real estate prices and reducing supply-demand imbalances.
- Improve Real Estate Sector Growth
- The real estate sector contributes 7% to India’s GDP. SWAMIH Fund 2.0 will revitalize the industry, leading to higher employment and economic growth.
- Stimulate Job Creation
- The completion of stalled projects will generate employment in the construction, manufacturing, and service sectors, benefiting millions of workers.
- Boost Bank and NBFC Health
- Many financial institutions are burdened with stressed real estate loans. By resolving stalled projects, banks can recover their investments, leading to a healthier financial system.
Challenges & Concerns
- While SWAMIH Fund 2.0 is a positive step, some challenges remain:
- Limited Fund Size:
- Although ₹15,000 crore is a large sum, India has over ₹4 lakh crore worth of stalled projects. More funds may be needed.
- Timely Execution:
- The fund must ensure fast approvals and disbursements to meet its objectives.
- Legal Hurdles:
- Some stalled projects face legal issues, making completion difficult even with funding.
- Developer Participation:
- Some builders may be unwilling to participate due to conditions imposed by the fund.
- Limited Fund Size:
Despite these challenges, SWAMIH Fund 2.0 remains one of the most promising government interventions in the real estate sector.
Conclusion
- SWAMIH Fund 2.0 is a game-changer for the Indian real estate market. By ensuring the completion of stalled housing projects, the fund will provide relief to homebuyers, boost the economy, and restore confidence in the sector.
- For homebuyers waiting for possession, this fund offers hope. For developers struggling with liquidity, it provides financial relief.
- And for India’s economy, it promises job creation, financial stability, and housing sector revival.
