FCC

Impact of SWAMIH funds in completing stuck projects

2021-10-12

Project delay is most common problem in India among mid and small builders. The lockdown situation across the nation made it difficult for developers to meet the project completion deadlines. However, as the market started opening, it is time for the real estate sector to make that giant leap towards making solid efforts in meeting the project completion deadlines. The government has been making concrete efforts to support the sector through its Special Window for Completion of Construction of Affordable and Mid-Income Housing Projects (SWAMIH) fund. SWAMIH fund has been so helpful that developers are queuing up for the fund to complete their stuck projects and hand over keys to long-suffering buyers. So far, Swamih has completed 1,100 homes in five projects, and going forward, if there is no Covid disruption this year, it is expected to deliver 10,000 stuck homes in this financial year. Swamih team does extensive technical due diligence before entering a project. They follow a two-way approach, where preliminary approval is given based on information available from the developer. Later, a desktop forensic due diligence and then intensive due diligence by 4-5 different companies on various aspects of the project including corporate, legal, forensic, title, and ESG determines the final approval.

In the past, surveys have shown that project delays are the single biggest reason for leading to a reduction in the number of passive buyers. Currently, the real estate sector is witnessing good growth. Maharashtra stands as the best example in witnessing registrations spike, despite the second wave of the coronavirus pandemic, especially after a reduction in stamp duty and home loan interest rate to as low as 6.60%.

With initiatives lie Swamih, we can hope India?s real estate sector to bounce back at a better rate than expected.