Union Budget 2025: SWAMIH Fund 2.0 Boosts Housing Completion

The Union Budget 2025 has introduced a significant initiative to address stalled housing projects through the launch of SWAMIH Fund 2.0. Building upon the successes of its predecessor, this fund aims to provide last-mile financing to delayed affordable and mid-income housing developments. The objective is to offer relief to countless homebuyers and breathe new life into the real estate sector by ensuring that projects which have already shown promise can finally cross the finish line.

Understanding the SWAMIH Fund

The Special Window for Affordable and Mid-Income Housing (SWAMIH) Fund was first established in November 2019. Its primary objective is to offer last-mile funding to stalled residential projects that are net-worth positive and registered under the Real Estate (Regulation and Development) Act (RERA). The fund focuses specifically on the affordable and mid-income housing segments. This is important because these segments cater to a large number of families looking for reasonably priced homes. By ensuring that financially viable projects receive the necessary support to reach completion, the SWAMIH Fund plays a key role in making housing more accessible and reliable.

In practical terms, many housing projects begin with high expectations but get delayed or stalled due to a lack of funds during critical stages of construction. SWAMIH provides the essential boost that these projects need, ultimately benefiting homebuyers who have long awaited their new homes.

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Achievements of SWAMIH Fund 1.0

Since its inception, SWAMIH Fund 1.0 has made remarkable progress. The first phase of the fund has been instrumental in reviving numerous projects that were in jeopardy of remaining incomplete. Some of its notable achievements include:

• Project Approvals and Funding:
  As of March 17, 2023, SWAMIH Fund 1.0 had approved 310 proposals, aggregating to ₹31,145 crore in funding. These approvals were aimed at supporting projects that would ultimately benefit approximately 1,91,367 homebuyers. Moreover, these initiatives unlocked projects worth an estimated ₹83,188 crore, thereby contributing significantly to the real estate market.
• Home Deliveries:
  By the same date, over 22,500 homes had been delivered to homebuyers. This milestone is especially important because many families who had been waiting for years finally received the keys to their new homes. The tangible progress made through SWAMIH Fund 1.0 underscores the importance of targeted financial support in reviving stalled housing developments.

These successes provided the momentum and confidence to launch an expanded version of the fund in the latest budget.

Introduction of SWAMIH Fund 2.0

Recognizing that challenges in the real estate sector still persist, the government announced SWAMIH Fund 2.0 in the Union Budget 2025. This new iteration of the fund is designed to accelerate the completion of additional housing units, particularly those that have been stuck in the “last mile” of construction.

Key elements of SWAMIH Fund 2.0 include:

• Financial Allocation:
  The fund has been allocated a fresh injection of ₹15,000 crore. This capital is sourced from a combination of contributions by the government, banks, and private investors. With this robust financial backing, SWAMIH Fund 2.0 is set to support a wider range of projects that have the potential to be completed successfully.
• Targeted Impact:
  The ambitious goal for this new fund is to facilitate the completion of an additional 1 lakh (100,000) housing units. This target is especially critical for middle-class families, who often face the dual burden of managing home loan EMIs while also paying rent for incomplete or delayed projects. By helping to finish these units, the fund promises to provide much-needed relief to countless families.

Through these initiatives, SWAMIH Fund 2.0 is expected to play a pivotal role in not only completing stalled projects but also in revitalizing the overall housing market.

Eligibility Criteria for SWAMIH Fund 2.0

To ensure that the funds are directed to the projects that need them the most, there are specific eligibility criteria for projects seeking assistance from SWAMIH Fund 2.0:

• Registration:
  Projects must be registered under the Real Estate (Regulation and Development) Act (RERA). This registration ensures that the projects adhere to legal standards and provide a level of transparency and protection for homebuyers.
• Project Status:
  The fund is primarily aimed at stalled or “brownfield” residential developments that are already underway but have halted progress due to financial shortfalls. These projects must be net-worth positive, indicating that they have a sound financial base and only require the last bit of funding to complete construction.
• Financial Viability:
  It is essential for projects to demonstrate financial viability. This means that beyond the immediate need for funding, the projects should have the potential to be profitable and sustainable in the long run. The idea is to support developments that not only finish construction but also create long-term value for homebuyers and investors alike.

By adhering to these criteria, SWAMIH Fund 2.0 ensures that the support is provided to projects with the greatest potential for success and broad impact.

Anticipated Impact on the Real Estate Market

The introduction of SWAMIH Fund 2.0 is expected to bring about several positive changes in the real estate sector:

• Homebuyer Relief:
  For many homebuyers, delays in project completion have meant years of uncertainty and financial strain. By facilitating the completion of stalled projects, SWAMIH Fund 2.0 promises to deliver homes to families who have long waited, thereby alleviating the pressure of managing both rent and home loan payments.
• Market Revitalization:
  Injecting much-needed liquidity into delayed projects will help restore confidence in the real estate market. As more projects reach completion, investors and developers may feel more secure about future investments. This revitalization could lead to increased activity in the housing market, benefiting not only homebuyers but also the broader economy.
• Economic Growth:
  The completion of housing projects has a ripple effect on related industries. From construction and building materials to interior design and landscaping, a surge in completed housing units can stimulate various sectors, create employment opportunities, and contribute to overall economic development.

Conclusion

The launch of SWAMIH Fund 2.0 underscores the government's commitment to addressing challenges in the housing sector. By providing targeted financial support, the fund aims to ensure that affordable and mid-income housing projects are completed, benefiting homebuyers and bolstering the real estate market.

In essence, SWAMIH Fund 2.0 is more than just a financial measure, it is a strategic push towards making housing accessible and reliable for everyone. As these projects reach completion, the positive impact will be felt across communities, boosting confidence in the market and driving economic growth. With this bold move, the government is taking a significant step toward ensuring that the dream of affordable homeownership becomes a reality for millions of families across India.

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