India's middle- and low-income homebuyers are aided by a specific federal funding series to complete stalled housing projects. Two major last-mile initiatives are already approaching completion after the special liquidity window was established in early 2019.

The project construction works, funded under the Special Window for the Completion of the Construction of Affordable and Mid-Income Housing Projects (SWAMIH), has recorded a significant pick-up and is expected to deliver seven phases of additional projects across the country in the second half of this year. Overall, this scheme will deliver more than 3,000 stalled houses.

Government Financial Aid to Finish Stucked Projects

The funding team encourages the developer to start on the same site with multiple work points. Unlike in the past, when developers paced construction to fit the sales velocity, the idea is to complete construction in the shortest speed of time. Irfan A. Kazi, Chief Investment Officer, SWAMIH Investment Fund I, informed SWAMIH construction sites probably have the highest density of workers per site because of work on multiple fronts as about there will be 5,000 workers on all operating sites at an aggregate level.

SWAMIH is an Alternative Investment Fund (AIF) category II that was declared in September 2019 by Finance Minister Nirmala Sitharaman and approved in November 2019 by the Cabinet. It is currently the largest private equity real estate team in the world, has now increased from a two-member team to 37 members at the time of launch.

With a green-shoe option of an additional Rs 12,500 crore, the fund aims to provide finance to allow stalled housing projects to be completed and ensure apartments delivery to troubled homebuyers. The fund has also enabled developers to complete construction aggressively. They also recognize that sales can only pick up when the project is complete, as most homebuyers are now only looking for ready to move properties.

The SWAMIH fund has helped developers to follow the concept of Complete and Sell Homes (CASH) while insisting that online banking or cheque-based accounts make all payments for products, services, sales and collections.

There are 4.58 lakh stalled housing units in 1,509 residential projects across the country, as per government estimates. For 136 ventures, the fund has cleared investments worth more than Rs 13,200 crore and began to allocate funds across 36 projects. The last mile of funding which was made available for the stalled projects has developed confidence among homebuyers.

By: Shailaja K