Funding of £735,000 has been committed to support the conversion of 21 new homes from open market to affordable rent at Belle Vue in Stanground.
The decision was made at the Annual Meeting (Wednesday) of the Cambridgeshire & Peterborough Combined Authority.
Metro mayor James Palmer told members: “The combined authority is committed to accelerating affordable housing delivery to meet local and UK needs and, in co-operation with Medesham Homes, support economic growth in the region.”
Developers Medesham Homes are a joint venture between Peterborough City Council and housing association Cross Keys Homes.
They applied for the grant to complete a development of 30 affordable homes on the site, with Phase 1 (nine units) already under construction.
The money is part of a £170 million devolution deal secured by the combined authority to fund the delivery of 2,500 affordable homes by March 2022.
Of this, £70 million has been allocated to fund 500 affordable homes in Cambridge. The remaining £100 million will be used to build 2,000 affordable homes across Cambridgeshire and Peterborough.
The release of the £735,000 funding means that Phase 2 can now go ahead with accommodation comprising eight three-bedroom homes, 16 two-bedroom homes and six one-bedroom homes.
Claire Higgins, chief executive of Cross Keys Homes and a board member of Medesham Homes, had previously said: “This development site forms part of Medesham Homes’ long term strategic development plan to deliver quality affordable homes throughout Peterborough to help tackle the challenging housing issues and longer-term homelessness problems.”