The government is finalising the framework for the SWAMIH-2 Fund and is expected to operationalise it shortly to provide last-mile financing for the completion of stalled housing projects, according to sources. The proposed Rs 150 billion fund is expected to bring relief to nearly 100,000 middle-class homebuyers whose investments remain stuck despite continued repayment of equated monthly instalments on home loans.

To support the initiative, the government has already earmarked Rs 15 billion as seed capital for the Special Window for Affordable and Mid-Income Housing (SWAMIH) Fund in the Union Budget for 2025–26. Sources said the mandates for the new fund are in the final stages of approval and will focus on extending last-mile funding to commercially viable projects, helping unlock investments tied up in stalled residential developments.

The first SWAMIH Fund was announced by the Centre in November 2019 as a stress fund to revive stalled housing projects across the country. Structured as an Alternative Investment Fund, the special window was created to provide priority debt financing for the completion of stressed residential projects, with SBI Ventures appointed as the investment manager. The fund is sponsored by the Secretary of the Department of Economic Affairs in the Ministry of Finance.

Under SWAMIH Fund-1, more than 55,000 homes in stressed housing projects have already been completed, with the fund targeting delivery of another 30,000 homes over the next three to four years. The fund currently has around 30 investment professionals with an average industry experience of about 15 years.

So far, SWAMIH Fund-1 has raised around Rs 155.3 billion to provide priority debt financing for the completion of stressed, brownfield and Real Estate Regulatory Authority-registered residential projects in the affordable and mid-income segments. The fund is considered a lender of last resort, as it backs first-time developers, established developers with troubled projects, projects with litigation issues, customer complaints and even non-performing asset accounts.

A study by data analytics firm PropEquity, commissioned by SBI Ventures in 2019, estimated that around 1,500 housing projects comprising about 458,000 units were stalled or stressed across India and required aggregate funding of approximately Rs 550 billion for completion.