An agreement has been reached between Argyll Community Housing Association (ACHA) and Argyll and Bute Council of a housing loan facility which will support the association's new build housing development programme.

The first facility will see a loan of £2.3m provided from the local authority's Strategic Housing Fund on the principle of a 25-year capital and interest mortgage.

In turn, this will go directly towards supporting the construction of 40 new homes for rent by ACHA. The homes will be located at Glenshellach, Oban and will be available for let from November 2014.

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Commenting on the agreement, Alastair MacGregor, ACHA's Chief Executive, said: "I am delighted that the work on this new initiative between the Council and ACHA has resulted in a financial facility being provided on favourable terms through the Local Authority's powers.

"In basic terms it allows ACHA to build much needed homes in Oban through a loan from its strategic housing partner, Argyll and Bute Council.

"I would like to thank the council for the innovation they have shown within their existing powers to provide housing mortgage finance to supplement the grants ACHA has been able to secure from the Scottish Government."

Councillor Robin Currie, Argyll and Bute's Policy Lead for Strategic Housing added: "In order to sustain the affordable housing development programme across Argyll and Bute the council has made provision for £5m lending from our reserves to registered Housing Association partners.

"We have recognised the challenges faced by the RSL sector in raising private finance in the current economic climate and we took a decision in 2012 to earmark reserves for this purpose."

(JP/MH)