Stewart Milne Group has secured an £80m loan through a UK Treasury guarantee to build 3,000 homes in Aberdeen.
The loan will be issued by the Bank of Scotland, enabling the group to begin construction of the Countesswells development.
The scheme’s capital value is expected to total £700m and will be phased over 15 years.
Chief secretary to the Treasury Danny Alexander said: “This is an excellent example of using the strength of the UK’s balance sheet and hard-won credit rating to guarantee and support infrastructure projects across the country.”
It is the latest project to be supported by the Treasury’s UK Guarantee scheme, where the government acts as guarantor on debt to help infrastructure projects raise finance.
Projects that have been supported by the scheme to date include Drax Power under a £75m guarantee, and £257m of backing for the Mersey Gateway Bridge.
Stewart Milne Group chief executive Glenn Allison said: “We are delighted that we have been successful in securing a guarantee through HM Treasury to assist in the delivery of Countesswells.
“It is a critical project for the city over the next 15 years, delivering much needed homes and community facilities that will support Aberdeen’s economic growth.”