The Union government is moving closer to operationalising the SWAMIH 2 Fund, a Rs 15,000 crore stress-resolution vehicle designed to provide last-mile finance to stalled housing projects across India. Officials familiar with the matter said the framework of the fund is in its final stages, with approvals expected shortly. The initiative is expected to bring relief to nearly one lakh middle-income homebuyers whose savings remain locked in incomplete homes despite ongoing loan repayments.
The new fund builds on the experience of the original Special Window for Affordable and Mid-Income Housing, launched in 2019 at a time when mounting developer stress and frozen credit markets had left thousands of housing projects incomplete. In the Union Budget for 2025–26, the government allocated Rs 1,500 crore as seed capital for SWAMIH 2, signalling a renewed policy focus on resolving stalled residential construction rather than creating new supply. According to officials, SWAMIH 2 will prioritise projects that are financially viable but stuck due to liquidity constraints, regulatory delays, or legacy disputes. “The idea is to unlock homes that are already sold and substantially built, ensuring delivery rather than speculative development,” said a senior government official involved in the fund’s design. By focusing on brownfield and RERA-registered projects, the fund aims to restore buyer confidence while stabilising stressed urban housing markets.
The earlier SWAMIH Fund demonstrated the potential impact of such targeted intervention. Since inception, it has enabled the completion of more than 55,000 homes and is on track to deliver another 30,000 units over the next few years. Managed by an investment arm of a public sector financial institution, the fund raised over Rs 15,500 crore from public and private sources and operated as a lender of last resort for projects shunned by conventional financiers. Urban housing experts note that SWAMIH’s significance lies not just in numbers, but in its systemic role. “Completing stalled projects reduces urban blight, improves land-use efficiency and prevents partially built structures from becoming long-term safety and environmental hazards,” said an urban policy analyst. Such interventions also reduce the carbon cost associated with demolition and redevelopment, aligning with broader goals of sustainable and resource-efficient cities. Data commissioned by the government before the first fund’s launch had estimated that nearly 1,500 housing projects, accounting for more than 4.5 lakh homes, were stalled nationwide, requiring funding of about Rs 55,000 crore. While market conditions have improved since then, pockets of stress remain, particularly in mid-income housing.
As SWAMIH 2 prepares for launch, policymakers see it as a corrective mechanism rather than a bailout. By tying funding to completion milestones and buyer delivery, the fund is expected to reinforce accountability while offering a pragmatic solution to one of India’s most persistent urban challenges: unfinished homes in rapidly growing cities.
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India To Launch SWAMIH Two Fund Completing One Lakh Stalled Homes Soon
