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Watford Community Housing has borrowed £65m from asset manager M&G.
The 5,300-home association said it would use the money to pay for its plans to build 675 homes over the next three years across south-west Hertfordshire.
It also intends to build 1,000 affordable homes by 2020, of which 100 have already been completed.
This latest deal takes the total amount invested in UK social housing by M&G to £6.5bn, including property transactions, public bonds and private placements.
Most recently, it invested £67m in build-to-rent homes for north London, paying for 148 new homes in Wembley.
Paul Richmond, director of finance and resources at Watford Community Housing, said: “This new source of funding will help us deliver on our growth aspirations and our ambition to provide affordable housing in south-west Hertfordshire.
“We are committed to delivering much-needed new homes and enhancing our local community areas. We were delighted by the level of interested generated by this placement and look forward to working with M&G as an investment partner.”
Mark Davie, head of social housing at M&G, added: “Watford Community Housing has a clear vision and ambition to deliver affordable homes to those in the area it serves. This deal brings benefits to our pension fund clients by generating long-term cashflows that are secured against residential property.
“It also demonstrates the important role institutional investors play in providing finance to organisations that have a positive impact on the communities they operate in and our wider society.”