The investment will fund the construction of the project at Raleigh Street, Walsall, which is set to create 66 new family homes.
There will be 23 two-bedroom and 39 three-bedroom and four four-bedroom houses, to be built by Vistry Partnerships.
Colliers International acted as property advisers and Dentons as legal advisers on the transaction.
This will form part of the second BTR fund advised by Gatehouse Bank which, since it was formed in 2015, has spent circa £90m on the construction of 684 single family houses across the UK.
Once completed, the fund will comprise a 750-unit single family housing PRS portfolio, which is being professionally managed through Ascend Properties.
Work started in September last year and is expected to be finished by summer 2022.
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The mainly residential area is said to be within walking distance of the centre of Walsall.
Paul Stockwell, chief commercial officer at Gatehouse Bank, said: “Gatehouse has a proven track record of delivering much-needed homes around the UK by successfully investing in and managing BTR schemes.
“This is another example of our intention to fund developments in the single-family housing sector, providing attractive, affordable and professionally managed homes.
“The Raleigh Street site has remained dormant for eight years so this is a fantastic regeneration opportunity that will provide a significant number of family homes.
“It’s been a great first deal with Vistry Partnerships and we look forward to developing our relationship with them.”
James Warrington, divisional managing director at Vistry Partnerships, commented: “This is a large mixed-tenure development opportunity for us in Walsall with great links to major nearby cities.
“It represents a significant contribution to the new-build local housing market in the area and we’re delighted to be able to work with [the bank] on it.”
Edward Marsden, senior surveyor in Colliers International’s BTR team, added: “This union of investor and developer will be a winning combination for this location and hopefully in many more.”