Special Window for Funding Housing Project

The Government has approved the formation of a ‘Special Window’ fund to offer priority debt financing for the completion of stalled affordable and middle-income housing projects. The Government has decided to create an ‘Alternative Investment Fund’ of about INR 25,000 Crore. Such a fund would be created to boost the stalled affordable and middle-income housing project.

As per the Finance Minister, out of the total approved INR 25,000 Crore, Government will provide INR 10,000 Crore. The remaining 15,000 Crore would be provided collectively by the State Bank of India (SBI), Life Insurance Corporation of India (LIC) and others.

In the present article, let us understand the meaning of the term ‘Affordable and Middle-Income Housing Projects’ and important aspects of the special window funding.

Meaning of Affordable and Middle-Income Housing Projects

Before understanding the other aspects of the special window, it is important to under the term ‘Affordable and Middle-Income Housing Projects’:

The housing projects can be termed as ‘Affordable and Middle-Income Housing Projects’ when it satisfies the following criteria:

RERA carpet area of the housing units does not exceed 200 sq. m.
The housing units price should be as follows:
- Up to or less than INR 2 Crores in Mumbai Metropolitan Region.
- Up to or less than INR 1.50 Crores in National Capital Region, Kolkata, Chennai, Bangalore, Pune, Hyderabad and Ahmedabad.
- Up to or less than INR 1 Crores in remaining parts of India.

Applying for Funding

The funds would be managed by the SBICAP Ventures Limited. In other words, SBICAP Ventures Limited would be the Investment Manager.
The Alternative Investment Fund would provide support to the builders who require last-mile funding to complete their stuck up projects.
The maximum funding to any single project under special window funding would be INR 400 Crore.
Types of projects that qualify the below criteria can be selected under the special window:
- Housing projects in an affordable and middle-income group that require last-mile funding to complete the construction.
- Housing projects that are already registered under RERA [(Regulation and Development) Act, 2016] can only qualify under the special window.
- Net worth positive projects (including NPAs).
- Housing projects that are undergoing proceeding under NCLT (National Company Law Tribunal).
Net worth positive projects means:
- (The value of receivables + the value of unsold inventory) > (the completion cost + the outstanding liabilities).