The Greater Noida Industrial Development Authority has come up with a plan to create a special relief fund to bail out the realty projects of small builders that are stuck up for one reason or another. This move is calculated to benefit more than a lakh homebuyers.
The proposal for Rs 1, 500 cr fund has been put up before the three-minister cabinet committee set up by UP chief minister Yogi Adityanath on September 12. The committee is yet to take a decision on this matter. Once cleared, developers would be able to take a loan from this fund at a low interest rate ranging between 3% and 5% to complete their projects and hand over possession of flats to homebuyers.
As per an official, some 70 to 80 housing projects in Greater Noida are stalled for shortage of funds. Builders of these projects are bogged down by liquidity crunch and do not have sufficient resources to complete their projects and hand over flats to more than one lakh buyers. These builders are also not able to get loans from banks or any financial institutions because of a poor credit history.
“In these cases, the Greater Noida Authority would also provide a counter guarantee after it has satisfied itself that the builder who is being given a loan will be able to repay the same. For understanding the financial and physical status of all stuck realty projects, a consultant will be hired by October 15 this year. This consultant will collect all relevant data of the group housing project besides validating each project,” he said.
Financial due diligence will also be exercised to check whether the project is viable and can be completed by opening an escrow account with existing buyers, whether a co-developer needs to be appointed through open bids with the consent of the builder etc.
“Only when the Greater Noida Authority is sure that the loans given will be recovered and projects completed, will the special relief fund be used,” the official added.