The Union Budget 2025 has placed a strong emphasis on reviving stalled real estate projects through the launch of SWAMIH Fund 2.0. Announced by Union Finance Minister Nirmala Sitharaman during her eighth budget presentation on February 1, this initiative focuses on providing last-mile financing to delayed affordable and mid-income housing projects that have been delayed due to financial constraints. With thousands of homebuyers stuck in incomplete projects, the government’s renewed commitment to this fund is expected to bring much-needed relief to both buyers and developers and maintain momentum in India’s real estate sector.
The SWAMIH Fund, first introduced in 2019, has already helped revive numerous projects by addressing liquidity issues in the real estate sector. However, with many more projects still stalled, the launch of SWAMIH Fund 2.0 signals the government’s intent to accelerate housing development and ensure that homebuyers receive their long-overdue properties. This article explores everything you need to know about the SWAMIH Fund, its impact so far, and what SWAMIH 2.0 brings to the table.
What is the SWAMIH Fund?
The Special Window for Affordable and Mid-Income Housing (SWAMIH) Fund is a government-backed initiative launched in November 2019 to provide last-mile financing to stalled housing projects across India. Many real estate projects, especially in the affordable and mid-income segments, had been delayed due to financial distress, leaving thousands of homebuyers in limbo. The SWAMIH Fund was introduced to bridge this funding gap and help complete these projects.
The SWAMIH Fund is registered with the Securities and Exchange Board of India (SEBI) as a Category II Alternative Investment Fund (AIF). Instead of functioning as a traditional lending program, it invests in RERA-registered, near-completion projects that are stuck due to a lack of funding. The fund’s sponsor is the Secretary, Department of Economic Affairs, Ministry of Finance, on behalf of the Government of India. The investment manager of the fund is SBICAP Ventures, a wholly-owned subsidiary of SBI Capital Markets, which, in turn, is fully owned by the State Bank of India (SBI).
As India’s largest social impact fund, SWAMIH plays a crucial role in reviving buyer confidence, reducing unsold inventory, and stabilizing the real estate market. With the introduction of SWAMIH Fund 2.0 in the Union Budget 2025, the government aims to expand this initiative and further accelerate the completion of stalled projects, ensuring that thousands of homebuyers receive their long-awaited homes.
SWAMIH Fund 1.0: Achievements and impact
The SWAMIH Fund was introduced to address the issue of stalled housing projects in India, which had left thousands of homebuyers in limbo. As per a 2018 report by the National Housing Bank, over 1,50,000 housing projects were delayed in 2019, with an estimated total cost exceeding Rs 2 trillion. Additionally, the report highlighted a shortage of 19.7 million housing units, with 9.2 million falling under the affordable and mid-income segments. The delays in project completion significantly affected homebuyers who were unable to take possession of their homes.
Since its inception in 2019, SWAMIH Fund 1.0 has played a crucial role in restarting halted real estate projects, particularly in the affordable and mid-income segments. Launched with an initial corpus of Rs 25,000 crore, the fund received contributions from the Government of India, State Bank of India, Life Insurance Corporation (LIC), and other investors.
One of the earliest success stories under this fund was the Rivali Park residential project in suburban Mumbai, which became the first stalled housing project to be completed with SWAMIH funding. This project provided homes to 640 families, positively impacting over 1.16 lakh individuals.
So far, the fund has facilitated the completion of 50,000 housing units in stalled projects, allowing homebuyers to finally move into their homes. Additionally, 40,000 more units are expected to be completed in 2025, easing the burden on middle-class families who have been paying both EMIs and rent.
Beyond helping homebuyers, the SWAMIH Fund has also contributed to the revival of ancillary industries linked to real estate and infrastructure by unlocking liquidity worth over Rs 35,000 crore. This injection of funds has benefited financial institutions through debt repayments and generated a multiplier effect of 2.5 to 3 times across various industries.
SWAMIH Fund 2.0: New Features and Announcements in Union Budget 2025
Despite the considerable achievements of SWAMIH 1.0, numerous projects remain stalled due to persistent liquidity challenges. To address this, the Union Budget 2025 introduced SWAMIH Fund 2.0, aiming to further address the challenges of stalled housing projects in the affordable and mid-income segments. This enhanced initiative seeks to expedite the completion of pending units and provide relief to affected homebuyers.
The government has allocated an additional Rs 15,000 crore to SWAMIH Fund 2.0. The fund is set to facilitate the expeditious completion of an additional 1,00,000 housing units. SWAMIH Fund 2.0 is structured as a blended finance facility, incorporating contributions from the government, banks, and private investors.
“The announcement of SWAMIH Fund 2.0 is a welcome step in addressing the challenges faced by stalled and delayed real estate projects. This initiative will provide much-needed relief to homebuyers and help accelerate housing delivery,” said Ramesh Menon, Founder Director Delhi Consortiums.
Eligibility criteria for funding under SWAMIH Fund 2.0
To qualify for funding under SWAMIH Fund 2.0, projects must meet specific eligibility criteria:
- Project Type: The project should be a residential real estate development primarily catering to the affordable and mid-income housing segments.
- Project Status: The project must be stalled or facing significant delays due to a lack of adequate funds. It should be net worth positive, meaning the value of sold receivables plus unsold inventory exceeds the cost required to complete the project and service the investment by the fund.
- RERA Compliance: The project must be registered under the Real Estate (Regulation and Development) Act (RERA).
- Construction Progress: The project should have completed at least 30% of the construction and development.
- Financial Status: Projects that have been declared Non-Performing Assets (NPAs) or are undergoing proceedings before the National Company Law Tribunal (NCLT) under the Insolvency and Bankruptcy Code (IBC) are eligible for funding.
- Developer Profile: The fund considers applications from first-time developers, established developers with troubled projects, and even those with a poor track record of stalled projects or customer complaints.
- Legal Considerations: Projects with litigation issues are also considered, as the fund aims to be the lender of last resort for distressed projects.
How will SWAMIH Fund 2.0 impact the real estate market?
SWAMIH Fund 2.0 is poised to make a significant impact on the real estate market by addressing key challenges such as stalled housing projects. “The government’s unwavering focus on resolving stressed housing projects and boosting infrastructure development is a welcome move for the real estate sector. The launch of SWAMIH Fund 2.0 will further accelerate the completion of 1 lakh units, ensuring liquidity and project completion,” commented Ashwin N Sheth, chairman and managing director, Ashwin Sheth Group.
By offering last-mile financing, the fund is not only revitalizing the construction of affordable and mid-income housing but also bolstering the overall market sentiment. This government-backed initiative is expected to restore trust among homebuyers and investors, leading to increased demand and more investments in real estate.
Moreover, the timely completion of delayed projects will help balance the supply and demand dynamics in the market, stabilizing property prices, particularly in the affordable and mid-income segments. The revival of construction activities will also stimulate broader economic growth, creating job opportunities in the construction and allied industries.
As Sangram Baviskar, CEO of Real Estate Solutions at TruBoard Partners, aptly pointed out, “The expansion of SWAMIH Fund represents a strategic intervention in India’s real estate landscape. This timely move addresses the critical need for liquidity in stalled affordable housing projects. The government’s continued backing of SWAMIH Fund demonstrates its commitment to precise capital deployment for resolving stressed assets. Beyond just project completion, this initiative catalyzes job creation and broader economic growth. The focus on last-mile funding is particularly crucial, though success will ultimately depend on efficient execution and deployment mechanisms.” This initiative is set to play a crucial role in transforming India’s real estate sector, bringing the vision of ‘Housing for All’ closer to reality.
Housing.com POV
The launch of SWAMIH Fund 2.0 in the Union Budget 2025 represents a crucial step forward in addressing the challenges faced by India’s real estate sector, particularly in the affordable and mid-income housing segments. With an additional Rs 15,000 crore allocation, this initiative will not only accelerate the completion of stalled housing projects but also help revive market confidence, stabilize property prices, and generate significant employment opportunities.
The fund’s focus on last-mile financing ensures that homebuyers who have been waiting for years will finally receive their homes. Additionally, the government’s unwavering commitment to resolving the issues of liquidity and stalled projects demonstrates a clear path toward realizing the vision of ‘Housing for All.’ By aligning with broader economic goals, SWAMIH Fund 2.0 is set to reshape the Indian real estate landscape and bring much-needed stability and growth to the sector.
