FPCE Hails Rs 15,000 Crore Fund to Complete Stalled Housing Projects; Wants Ban on Defaulting Builders

Homebuyers' body FPCE on Sunday said the government's decision to set up a new Rs 15,000-crore stress fund to complete stalled housing projects will benefit aggrieved flatowners, and suggested that such defaulting builders should be banned from launching any new projects.

In November 2019, the Centre announced a stress fund named 'Special Window for Affordable and Mid-Income Housing' (SWAMIH), to complete stalled housing projects across India.

The first fund, with a corpus of Rs 15,530 crore, is being managed by SBICAP Ventures Ltd, a State Bank Group company.

In the Budget speech, Union Finance Minister Nirmala Sitharaman on Saturday announced setting up of SWAMIH Fund-2 with a corpus of Rs 15,000 crore, which will help complete 1 lakh units.

Reacting to the development, Forum For People's Collective Efforts (FPCE) President Abhay Upadhyay said, "SWAMIH Fund 2 is certainly a step much needed. As stated by the FM that this will help in completing additional 1 lakh dwelling units."

This is over and above 50,000 units already completed and 40,000 units under construction under SWAMIH Fund 1 scheme.

"This will give much relief to the suffering homebuyers," Upadhyay said.

He suggested that the government should identify all stalled housing projects and also assess the total fund requirements to complete those homes.

"It's time to complete all such stressed project in planned manner to clean the slate once and for all," Upadhyay said.

Moreover, he said, "Since government funds are blocked in such schemes, which of course is from taxpayers' money, it is also important to identify and segregate such builders who put hard-earned money of homebuyers at risk just for their personal greed and debar them from launching any new projects."

The real estate industry needing budgetary support raises several questions about the functioning and intent of the industry, Upadhyay said, calling for some serious introspection.

Sitharaman, in her Budget speech, announced the SWAMIH Fund-2 following the success of the first fund.

Under the SWAMIH Fund-1, the finance minister highlighted that 50,000 dwelling units in stressed housing projects have been completed and keys have been handed over to homebuyers.

Another 40,000 units will be completed in 2025, further helping middle class families who were paying EMIs (equated monthly installments) on loans taken for apartments, while also paying rent for their current dwellings, the finance minister said.

"Building on this success, SWAMIH Fund-2 will be established as a blended finance facility with contribution from the government, banks and private investors. This fund of Rs 15,000 crore will aim for expeditious completion of another 1 lakh units," Sitharaman said.

Under the SWAMIH Fund-1, Rs 15,530 crore has been raised so far with an aim to provide priority debt financing for the completion of stressed, brownfield and Real Estate Regulatory Authority (RERA) registered residential projects that fall in the affordable, mid-income housing category.

A study, by data analytic firm PropEquity commissioned by SBI Ventures Ltd in 2019, estimated that about 1,500 projects with 4.58 lakh housing units were stalled/stressed and required aggregate funding of Rs 55,000 crore to complete the stalled projects.