The loan will support the development of the first of 1,150 homes at Port Loop on the edge of Birmingham city centre
Phase 1 of the development will include a new park, improved canal towpath and 77 homes built around shared gardens.
The first phase of the Icknield Port Loop scheme will provide a mix of 37 traditionally built properties and 40 modular, factory built homes. The first prefab units have been delivered to site this week and craned into place.
The wider scheme is being coordinated by Urban Splash and Places for People, whose joint venture is working in partnership with the original landowners, Birmingham City Council and Canal & Rivers Trust.
Ian Martin, head of investment in the Midlands for Homes England, said: “The sheer scale of the scheme provides the opportunity to build a whole new community and will be one of the largest regeneration schemes in the Midlands. This will provide a much needed boost to the region’s housing stock, which is exactly what the Home Building Fund was established to do.”