SWAMIH investment fund hits a milestone of completing 50,000 homes

Funded by the finance ministry, the fund is designed for debt financing of stressed and brownfield residential properties.
Image used for representation only.
Image used for representation only.(File Photo)
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The Special Window for Affordable and Mid-Income Housing (SWAMIH) investment fund has achieved a milestone by completing 50,000 homes and aims to deliver 20,000 homes every year for the next three years.

Funded by the finance ministry, the fund is designed for debt financing of stressed and brownfield residential properties. It was set up in 2019 and is managed by SBICAP Ventures Ltd, a State Bank Group company. It has no precedent or comparable peer fund in India or in the global markets.

"Milestones achieved: 50,000 homes completed under SWAMIH Fund. Transforming lives of homebuyers in stalled projects, redefining impact investing and setting benchmark in real estate," SBI Ventures said in a post on X.

The fund has raised Rs 15,530 crore so far with the aim of providing priority debt financing for the completion of stressed, brownfield, and Real Estate Regulatory Authority (RERA)-registered residential projects that fall in the affordable and mid-income housing category.

The target corpus of the fund was Rs 12,500 crore, with a green shoe option of Rs 12,500 crore. The fund achieved its first close with a capital commitment of Rs 10,037.5 crore and its final close with a capital commitment of Rs 15,530 crore on 6 December 2022.

The sponsor of the fund is the Secretary, Department of Economic Affairs, Ministry of Finance, Government of India, on behalf of the Government of India.

Since the fund 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, it is regarded as the lender of last resort for distressed projects.

A study by PropEquity, commissioned by SBI Ventures Ltd in 2019, estimated that about 1,500 projects with 4.58 lakh housing units were stalled or stressed and required aggregate funding of Rs 55,000 crore to complete the stalled projects.

In the upcoming Union Budget, real estate players expect increased fund allocation for stressed projects through the SWAMIH fund to improve liquidity in stressed residential developments.

Sharad Mittal, Founder & CEO of Arnya Real Estates Fund Advisors, said that on the financing front, developers seek easier access to credit and lower interest rates to ease liquidity challenges.

“Policies can be outlined for priority financing for affordable housing projects to incentivise the developers to take up such projects and bridge the demand-supply gap. Further investment through schemes such as SWAMIH (The Special Window for Affordable and Mid-Income Housing) to enable the completion of stuck projects will instil confidence in buyers to make purchase decisions,” stated Mittal.

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