The loan was provided to Elemento Group, which will use the funding to facilitate the demolition of an existing property and develop a 25-unit residential building.
The scheme will consist of eight social housing units.
A number of complex legal matters arose during the arrangement, which were resolved between the housing association, the mezzanine lender and Blackfinch.
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John Hartigan, investment manager at Blackfinch, said: “We are really pleased to be funding this development, which has an important affordable housing element.
“It is one of the more complex transactions we have been involved in and has been a real team effort across Blackfinch; working closely with the borrower, housing association and the mezzanine funder to deliver completion.
“Elemento [is] an experienced developer [which] had been let down at the last minute.
“We were delighted to be in a position to support and help them.”
Blackfinch typically lends up to 70% LTV and 85% loan-to-cost and focuses on senior and stretched senior loans.