UP RERA Orders Realtors to Apply for Stress Fund
The Real Estate Regulatory Authority of Uttar Pradesh (UP RERA) has written to over 1200 developers asking them to apply for a stress fund announced by the central government.
The UP RERA authority said in a media release that the action has been taken in order to make sure that the promoters of such projects are informed of the scheme so that the projects are completed on time and the home buyers of such projects are able to get their home.
A UP RERA official said that considering a large number of stalled real estate projects, registered with RERA are in Uttar Pradesh in which the houses of above one lakh home buyers are connected. So, the UP RERA also held a meeting with promoters in November to make them aware of the scheme so that they are able to apply for the last mile funding under the stress funds on time and in a proper way.
A month ago, the central government has offered a sum of Rs 25,000 crore stress fund out of which Govt of India (GOI) shall invest up to Rs 10,000 crore and the rest shall be contributed by banks, LIC, and other sources.
The UP RERA official further added that the fund will be established as a Category-II AIF (Alternative Investment Fund) debt fund registered with SEBI and would be professionally run. For the first time, AIF under the Special Window, SBICAP Ventures Limited has been employed to be the Investment Manager. Projects which are in NCLT can also apply, given no resolution plan has been approved by the NCLT court in such projects.
The Investment Manager will consider if there is any need to replace the developer for the project. They will decide the returns based on the risk profile and features of each project.
The fund will manage the disposal of capital and control the accomplishment of projects by the developer directly or through 3rd party services. Existing lenders would be discussed as part of the approval process.
Home-buyers have been advised to interact with their respective lending institutions to ask important guidance for further or additional borrowing or regarding their existing home loans within the existing legal and regulatory house and the standard board approved policies of the lending institutions or banks.
What is net-worth positive projects?
Net-worth positive projects are those projects where the value of receivables plus the value of unsold inventory is greater than the completion cost and outstanding liabilities at the project-level.
What are the eligibility criteria for a project to avail of the stressed fund?
- The project should be RERA registered
- Carpet Area of housing units should not exceed more than 200 sq.mt
- It should be fall under the affordable and mid-income group segment
- It is stalled due to lack of funds
- The project should be net-worth positive
- Priority will be given to those projects which are very close to completion
- Cost of the units shall not be more than Rs 1.5 crore if the project is located in the NCR region and up to or less than Rs 1 crore for rest of India
Data Source: Google
