SWAMIH Investment Fund II Set for Formal Launch; A ₹15,000 Crore Lifeline for Stressed Housing

In a positive development that promises to bring renewed hope for hundreds of thousands of distressed homebuyers across India, Finance Minister Nirmala Sitharaman today informed members of the Lok Sabha that the formal launch of the SWAMIH Investment Fund II has officially begun. Following the success of its predecessor, the second phase of the government-backed investment fund aims to address the long-standing issue of stalled housing projects across India. The Finance Minister presented the Union Budget 2026-27 during the Lok Sabha session and announced a new funding allocation of ₹15,000 crore for the SWAMIH Investment Fund II. This funding will help develop 100,000 new housing units, primarily serving affordable and mid-income housing needs. This development marks a continuation of the government’s mandate to provide last-mile priority debt funding to projects deemed viable but currently stalled due to a lack of liquidity.

The announcement comes at a time when the first phase of the Special Window for Affordable and Mid-Income Housing Fund (SWAMIH) has achieved major milestones by committing investments in as many as 148 projects across the nation as of January 31, 2026. The Finance Minister pointed out that the portfolio of the Special Window for Affordable and Mid-Income Housing Fund had successfully delivered 63,200 homes, with a total of over 1.01 lakh homes currently in the pipeline. The impact of the Special Window for Affordable and Mid-Income Housing Fund goes beyond the construction of homes, as it has also helped restore buyers' confidence by reviving projects that were earlier classified as non-performing assets or were mired in legal disputes. The Finance Minister pointed out that the Special Window for Affordable and Mid-Income Housing Fund acts as a lender of last resort and is ready to work with first-time developers or those with a history of stalled projects, provided the projects are RERA-registered and net-worth positive. 

The success of the first phase has set the benchmark for the role government intervention can play in stimulating the overall economy, as the revival of the projects has led to demand for more than 20 lakh tonnes of cement and 5.5 lakh metric tonnes of steel. The initiative has created more than 36,000 job opportunities, which include positions for both skilled and unskilled workers. The fund operates under SBICAP Ventures Limited, a subsidiary of the State Bank of India and functions as a Category II Alternative Investment Fund. Its professional management system ensures that funds are only utilised upon the achievement of specific project milestones. The fund has successfully returned almost 50% of its total capital, which consists of investments from the Government of India, PSU banks and LIC, back to its investors. 

The criteria for the project to be funded under the new SWAMIH II window are extremely stringent, including registration under the Real Estate Regulatory Authority of the respective states and falling under the affordable and mid-income segments. These segments are identified based on particular pricing limits, like projects costing less than ₹2 crore in the Mumbai Metropolitan Region and projects costing less than ₹1.5 crore in the National Capital Region, Pune, and other major metros. The project should also be net-worth positive, i.e., the value of receivables and unsold inventory should exceed the completion cost and the existing liabilities. The program’s launch will bring relief to middle-class families, who are facing the burden of paying both their home loans and house rents every month. The government is launching the program to complete the projects rather than providing bailouts to developers. Hence, the dream of homeownership will not be out of reach for people living in major cities across India, despite previous project delays.