As a home buyer stuck in an unfinished project, one can check the eligibility conditions if the project is eligible for Rs 25,000 crore of AIF.
For those home buyers whose residential projects have got stuck due to lack of funds with the developer, the announcement made by the government related to the funding of stalled projects has come out as a welcome relief. The Union Cabinet has recently approved the ‘Special Window for Funding Stalled Affordable and Middle-Income Housing Project’, wherein the government will be the Sponsor infusing up to Rs 10,000 crore into the projects. But, will your specific project be eligible to get a helping hand from the government’s funding programme? This will depend on whether your project is eligible and qualifies for the funding.
As the builder is not completing construction, in many cases, several home buyers have reportedly stopped making EMI payments to the banks. Therefore, first, you need to find out if your residential project meets the eligibility criteria and then either you may approach your lender if home loan EMIs are unpaid from your side. “Both home buyers and developers can approach the lending institutions and ask for the revival of their existing home loans or additional funds,” says Ramesh Nair, CEO & Country Head – India, JLL.
With funds at the disposal, the aim of the scheme is to complete the unfinished projects as early as possible and hand over the flats to the home buyers. Importantly, those projects which have been declared as NPA or have been undergoing NCLT proceedings, will also qualify for the funding.
The structure of the fund will be that of a Category-II AIF (Alternate Investment Fund) debt fund registered with SEBI and would be professionally run. In addition to the government contribution, banks, LIC and other institutions are also expected to add-on to the kitty taking the total corpus to around Rs 25,000 crore. SBICAP Ventures will act as the Investment Manager of the AIF.
To get an idea if your project will qualify, you need to look at the eligibility conditions of the projects as below:
Lack of funds
The project has to be in an incomplete stage due to lack of adequate funds. So, if your project is stuck because of any other reason, the funding will not be provided.
The funding is restricted to projects which are catering to the affordable and middle-income category. Projects with a unit not exceeding 200 sq m. (2150 sq ft) will be the cut-off limit. Also, units priced up to Rs 2 crore in Mumbai Metropolitan Region, up to Rs 1.5 crore in NCR and up to Rs 1 crore in the rest of the country will be eligible.
Net-worth positive projects
Funding will only be to those projects which are net-worth positive. Simply put, net-worth positive will mean – The value of unsold inventory and any receivables from customers is greater than the completion cost and outstanding liabilities at the project-level for SBICAP Ventures.
Only RERA registered projects
Importantly, only those projects which are registered under RERA will be eligible for funding. “An unregistered project cannot be given the money under the ambit of AIF. This also means that states, which have not implemented RERA may not benefit from this liquidity shot,” says Nair.
Only those projects which are very close to completion will get qualified for the funding. The short-listing of the projects will be done by SBICAP Ventures.