Apply for Centre’s stress fund, Rera tells promoters
GREATERNOIDA: The Uttar Pradesh Real Estate Regulatory Authority (Up-rera) has recommended to a number of promoters, who have projects in the Gautam Budh Nagar district and are undergoing a fund crisis, to apply for the Central government’s scheme of last mile funding.
The scheme, announced by the Union finance ministry about a fortnight ago, allows developers to seek funding for projects in which about 80% of the work has been done but are stuck due to lack of funds. Such projects can seek benefits as part of stress fund package from State Bank of India (SBI) Capital so as to finish their projects. The scheme was rolled out for the real estate sector pan India.
The move comes after the Uttar Pradesh real estate regulatory authority (UP Rera) asked developers to seek stress fund under this scheme.
“We have sent letters to all promoters whose housing projects are registered with us. In the letter, we have advised them to submit their proposals before SBI Capital that will evaluate, assess and then decide if a project is eligible for funding or not. Our objective is that maximum developers get last mile funding from SBI capital so that buyers can get their homes without further delay,” said Rajive Kumar, chairman of UP Rera.
According to the announcement by the ministry, a stress fund is to be given to housing projects which fulfill certain conditions. These include project registration with Rera, project being stuck due to fund crisis, affordable or middle-income category project, net worth should be positive, projects should be in final phase of completion, housing unit’s carpet area should not be more than 200 square metres, per apartment cost should not exceed ₹1.5 crore and the maximum the project can make is ₹400 crore, among some others. The funding will be a loan for the developers.
“The ministry of finance has released general guidelines as to who is eligible for last mile funding. However, the exact detailing on eligibility of projects is yet to come,” said Kumar.
The confederation of real estate developers association of India (Credai) welcomed the move, saying that last mile funding to stuck projects will address the fund crisis issue that has delayed many projects.
However, the confederation’s offcials said they do not know how many builders have applied seeking last mile funding for their respective projects as of yet.
“Builders have been applying on their own directly to SBI Capital. So we do not have the number of promoters who have applied. Also, the ministry guidelines are yet to give clarity on certain points such as if the builder should first clear authority’s financial dues or finish the project to deliver apartment then what happenes. Also, we are waiting for clarity on what should be mortgaged as collateral,” said Deepak Kapoor ex-president of Credai’s Western UP wing and member of the confederation.
As per the estimate of the UP government, there are around 3 lakh apartments delayed due to funding crisis in the district in areas under the Noida, Greater Noida and the Yamuna Expressway authorities.
“The last mile funding will be given on case to case basis. Therefore the promoters should apply and seek the fund,” Kumar said, adding promoters have to inform Rera when applying for the scheme.