SWAMIH Fund II (2019): Reviving Stalled Housing Projects in India

Policy Update
Omkar Shelar

Introduction 

The SWAMIH (Special Window for Affordable and Mid-Income Housing) Investment Fund was initiated by the Government of India in November 2019 to resolve the problem of stalled housing projects that were financially viable but were starved of last-mile funding. The fund is supervised by SBICAP Ventures Ltd, the subsidiary of the State Bank of India, and supported by the Ministry of Finance. Its main aim was to take up affordable and mid-income housing projects registered under RERA (Real Estate Regulatory Authority) nearly completed but were being held up due to a lack of funding.

With a total corpus of ₹25,000 crore (including a ₹12,500 crore green shoe option), the fund aimed to ensure the completion of more than 80,000 housing units in India, directly and positively helping distressed homebuyers and reviving the real estate sector. In the Union Budget 2025, the government launched the SWAMIH Fund II to further resolve the housing crisis as committed. SWAMIH Fund II, which envisages a corpus of ₹15,000 crore, is a bid to complete another 1 lakh stalled homes. 

Objective

The central aim of the SWAMIH Funds (I and II) is to help move along stalled housing projects in the affordable and mid-income brackets. These projects are quite stalled because of financial issues, although they are financially attainable and legal.

Key objectives include: 

  • Last-mile financing for brownfield-over RERA, a concept that combines brownfield redevelopment with the regulations of the Real Estate Regulation and Development Act 2016, applies to registered projects that are net-worth positive.
  • Relieving lakhs of middle-class homebuyers whose projects are unfinished and are obliged to pay on both EMIS and rent.
  • Since this sector is a major contributor to GDP and employment, it rejuvenates confidence in the real estate sector.
  • Bumping up liquidity in the housing market and restoring confidence between developers and home buyers.
  • Supporting the Government’s “Housing for all” mission through the delivery of housing units in stressed projects.
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Source : Prepared by author

Performance 

SWAMIH Fund I

During its operations to date, SWAMIH Fund I has accomplished a lot in consolidating India’s sagging housing sector. 

As of early 2025: 

  1. More than 50,000 houses have been built, and 40,000 units are under construction and will be delivered shortly.
  2. The fund has signed off on investments in over 130 projects all over India, including the big metros of Mumbai, NCR, Pune and Bengaluru.
  3. The total overall capital raised is ₹15,530 crore against investment approvals of more than ₹12,000 crore.
  4. One of the success stories is the one from Mumbai, Rivali Park, which was one of the first to be given under this fund. Previously, the project was held up for years; that put the buyers in discomfiture. Two years into the project, the construction resumed using money from the SWAMIH fund, with the homes handed over as a precedent to the other cases.

SWAMIH Fund I not only revived the real estate ecosystem by indirectly aiding employment, material suppliers, and contractors, but it was a broader stimulus of the economy, not just home delivery.

SWAMIH Fund II 

  1. SWAMIH Fund II was established in the year 2025 and follows on from the success of the first fund. A fund of ₹15,000 crore, which is the planned corpus, has been initiated to prop up the immediate completion of an additional 1 lakh delayed homes.
  2. The second fund will adopt a blended finance model, with national support and private sector endeavours (banks and institutional investors) as its hallmarks. It will likely focus on the same type of projects as the first one — net worth positive RERA-registered and stalled for financial reasons.
  3. SWAMIH Fund II is an answer to the ongoing need for professional intervention in housing. Even though post-COVID, the real estate sales have been on an upward trend, a substantial number of projects are still in progress. The fund is meant to come where conventional lenders are reluctant to, hence security and hope to thousands of potential homebuyers.
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Source: Prepared by author

Challenges 

SWAMIH Fund I  

  1. Regulatory Delays: Navigating multiple regulatory approvals was one of the greatest challenges — the land titles, construction permits, and legal clearances would hold up disbursement and progress.
  2. Project Selection: There was difficulty in identifying projects that were actually net worth positive and well worth reviving, with developers usually not very forthright in their financial reporting.
  3. Execution Delays: Even with funding, on-ground implementation of the projects slowed down on account of labour shortages, which were exacerbated by COVID-19, as well as poor planning on the part of some developers.
  4. Trust Deficit: Countless homebuyers continued to be skeptical about government involvement out of experience, and others were reluctant to step out of the shadows, fearing financial examination.

    SWAMIH Fund II 

  1. Fewer Eligible Projects: As the overall market is strengthening, it is possible that there will be fewer big, eligible, stalled projects for Fund II to invest in. That may influence the magnitude of impact.
  2. Private Participation: The second fund is based on grants from banks and private investors. Investment of private capital in an extremely high-risk area such as distressed real estate may be challenging.
  3. Implementation Monitoring: The need for effective monitoring systems to ensure fund usage and progress in hundreds of projects was another area in which the first fund ran into difficulties early on.
  4. State-Level Hurdles: Cooperation with the authorities of the state is necessary for approvals and execution. Imbalanced support from state to state could slow the rate at which the project’s activities progressed.
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Source : Prepared by author

Policy Recommendations  

To increase the effectiveness of SWAMIH Funds and to have a lasting impact, the following policy recommendations are proposed:

  • Digitise Approval Systems: Development of fast-track one-window clearances for housing projects through the introduction of a centralised online portal incorporating RERA databases as well as state portals.
  • Establish a Monitoring Body: Form an integrated regulatory oversight committee composed of SBICAP, MoHUA and officials of the state to monitor project progress and fund disbursement in real time.
  • Attract Private Capital: Provide credit guarantees, or tax exemptions or government co-investment incentives (government or other development partner) to stimulate institutional investors and banks to contribute to SWAMIH Fund II.
  • Grievance Redressal Mechanism: Request that there be an open system through which owners could file complaints and obtain status updates of projects sponsored under SWAMIH.
  • Developer Accountability: Introduce severe performance-related clauses to funding agreements. Disbursements should be milestone-based and third-party audited.
  • Expand Eligibility: Think about expanding assistance to smaller Tier 2/3 city projects that are seldom given attention by conventional financiers, but which are useful for a major part of the middle class of India.
  • Public Awareness Campaigns: Run targeted outreach to educate homebuyers, developers, and investors on SWAMIH Fund II and how they can get involved or benefit.
  • Integration with PMAY: Integrate SWAMIH with the Pradhan Mantri Awas Yojana (Urban), so that subsidies, registration, etc., can be taken up in a smooth manner.

Such policy changes will enable the government to ensure that the SWAMIH funds deliver homes as well as effect large-scale reform in housing finance and project governance.

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Source : Prepared by author

Conclusion 

The SWAMIH Investment Funds are a crucial government effort to save no longer effective housing projects and provide much-needed bailouts to homebuyers. Through funding of the last mile for viable but delayed projects, the funds renew faith in the real estate sector, provide jobs, and circulate economic activity. Although the first fund, therefore, already shows impressive results, SWAMIH Fund II is a continuation and extension of this initiative. To make its impact as high as possible one should deal with implementation challenges and involve stakeholders. With the right policy support and execution, these funds will go a long way to make possible “Housing for All”.

References

About the Contributor: Omkar Shelar is a policy researcher at IMPRI and a postgraduate student of Public Policy and Governance at the Tata Institute of Social Sciences, Hyderabad with a keen interest in Data driven policy making and analysis. 

Acknowledgement: The author extends sincere gratitude to Dr Arjun Kumar and Aasthaba Jadeja for their invaluable guidance and support.

Disclaimer: All views expressed in the article belong solely to the author and not necessarily to the organization.

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