In November last year, the Centre had announced a Rs 25,000-crore fund to help complete over 1,500 stalled housing projects comprising 4.58 lakh housing units across the country.
Many real estate developers have been complaining that they are not able to get funds from the government-backed Special Window for Affordable and Mid-Income Housing (SWAMIH) as the existing lenders are not giving no objection certificates (NOCs) ceding charge on the properties.
As per the rule, the SWAMIH fund requires an NOC for ceding senior charge from the existing lenders in the project.
Addressing a virtual conference organised by NAREDCO, Irfan A Kazi, Chief Investment Officer, SWAMIH Investment Fund, SBICAP Ventures Ltd, said 36 proposals have been given final approval and 99 in-principle nods, for getting funds, benefitting around 90,000 homebuyers.
Kazi asked builders, whose projects are stressed and not able to secure funding from normal banking and NBFCs routes, to apply for SWAMIH fund.
He said the fund is not only for stalled housing projects but also for stressed ones that need last mile finances for completion.
“Banks and NBFCs may be far more willing to cede charge,” he said, if the financial institutions did not give NOCs earlier does not mean that they would reject even now.
He said banks and NBFCs are most likely to cede charge.
Kazi said the objective of this fund is to complete construction, even if there are no fresh sales bookings and sales collections from existing customers.
He noted that sales collection from existing homebuyers and fresh sales have improved in those projects that have been approved to receive SWAMIH fund.
“We get added credibility to project,” Kazi said.
Giving details about SWAMIH fund, he said the project management consultants give daily report about the progress of construction on the sites.
Kazi said all the expenses are through bank transfer, cheques and drafts. Even petty cash expenses are being done through legitimate channel.
The SWAMIH fund is also ensuring that projects comply with all regulations, he said.
“SWAMIH INVESTMENT FUND I” is the name of this special Window and it is in the form of an alternative investment fund (AIF).
The Centre is infusing Rs 10,000 crore into this stress fund, while the remaining being provided by state insurer LIC and the country’s largest lender SBI.
Only RERA-registered projects with positive net worth will be provided funds.
The investment manager of the fund is SBICAP Ventures Ltd, an asset management company that is a wholly-owned subsidiary of SBI Capital Markets Ltd, which in turn is a wholly-owned subsidiary of the State Bank of India.