A loan facility of up to £5 million for the development of new homes in Stevenage was agreed by Herts County Council on Monday.
The plans will see houses built by Herts Living Ltd in the Shephall Green area, where planning persmission has already been granted for the development of two four-bedroom homes.
Herts Living Ltd, whose shareholder is the council, plans to build its first new homes on the disused site, and will use the remaining land to provide additional car parking for Greenside School.
The new homes are expected to be completed in the winter of 2020.
Councillor Ralph Sangster, cabinet member for resources and performance, said: "Through HLL, the county council is playing its part to deliver new homes to ensure that future generations can afford to live, work and raise a family in the county."
Steve Faber, managing director at HLL, added: "The agreement of this funding will widen the scope of HLL activity. There is a potential pipeline of 30 small sites across the county that could provide up to 100 new homes in five years."
When asked about the funding's specific total, a Herts County Council spokeswoman said: "detailed financial modelling for Shephall Green is confidential."
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