The funding is being made available from charitable bonds via Allia, a social investment charity who issues the bonds on the governments behalf.
The organisation has provided Dumfries and Galloway Housing Partnership with a £5m loan.
The interest on the loan, around £1.8 million, will be converted into a charitable donation, which will be given to housing associations for the construction of new social housing.
Overall, £47m has been provided by charitable bond investments to facilitate the construction of 661 'affordable' homes across the country. An additional £11m has been generated for the construction of new social housing.
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Housing Minister Kevin Stewart said creating more 'affordable' housing is a "key priority" for the Government.
"By investing in housing across the country we are also helping to attract and retain people in our rural communities.
"We have committed to deliver 50,000 more affordable homes over the next five years, backed up with investment of more than £3 billion. Today’s announcement marks another step on the road to delivering that pledge.
"Innovative financing schemes such as charitable bonds play a major role in helping us deliver this major expansion in housing supply. We invested £26.5 million last year and have committed to invest the same again this year and we remain the only Government in the UK to do so.
"Through these bonds we are also maintaining Scotland’s leadership in financial innovation, working with partners to deliver more for less public investment."
Zoe Forster, Chief Executive of Dumfries and Galloway Housing Partnership, added: "DGHP is delighted to be able to take part in the Scottish Government funded Allia bond programme. The loan we have just concluded will be invested in new build housing in Dumfries and Galloway, and will allow us to move forward faster than we had expected to meet the housing needs of our communities."
(LM/CD)
