Taking a more lenient approach, SBI Cap Ventures, which is managing the proposed Rs 25,000-crore stressed real estate asset fund, may allow 5-15 per cent of receivables and sales from a targeted project to existing lenders.

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Originally when the fund was proposed, SBI Cap Ventures fixed the lending rate at 15 per cent and with a condition that it will have first claim on future receivables of the project.

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"When we enter any project for last-mile funding, we come in as a senior lender while the existing creditor becomes junior, which is a standard in such arrangements.

"So we have the first right on the receivables. However, we are now thinking that a minor portion of the cash flows generated, could be directed to existing lenders," SWAMIH Investment Fund I Chief Investment Officer Irfan Kazi said at a CII Real Estate summit.

Out of the cash flows that would be generated from the receivables and sales, once the project resumes, around 5-15 per cent of this amount can be given back to existing lenders, may be through waterfall distribution method, as the case may be, he said.

"While the existing lenders would get nearly 10 per cent of the inflows, 90 per cent will still come back to the stressed fund, which we will be diverted back in construction," Kazi said.

The fund has so far lent to two stressed projects with one in Mumbai and the other in Bengaluru, which will benefit nearly 1800 home buyers.

Speaking about the response the fund has received so far, Kazi said, "there has been a deluge of applications. We have got more than 300 proposals. As many as 18 real estate projects, valued at around Rs 22,000 crore, have gone through the investment committee process."

The Special Window for Completion of Construction of Affordable and Mid-Income Housing (SWAMIH) fund was created by the government with contributions from financial institutions such as LIC and SBI to complete over 1,600 stalled projects with 4.5 lakh homes.

Recently, mortgage lender LIC Housing Finance said it has identified 14 projects to be referred to the fund for last-mile funding, where it is the sole lender with a total exposure of Rs 1,400 crore.