The federal government said Tuesday that it will help build more than 2,600 rental homes in Toronto by providing $1.2 billion worth of fully repayable low-interest loans.

The loans will be provided to seven projects in the city through the federal Rental Construction Financing Initiative and will help build a total of 2,644 rental homes.

“These new homes will be located close to transit, work, and school. Homes for people getting started in their careers, homes for people raising a family, and homes that people of all ages will be proud to call their own,” Finance Minister Chrystia Freeland told reporters at the announcement in Toronto Tuesday.

The federal government says the program, which incentivizes the development of purpose-built rental through low-interest loans, will create 71,000 new rental housing units across Canada by 2027 -28.

Freeland hailed the initiative as “an investment in the city of Toronto, and in the people who rent homes in this great city.”

In a statement she said the federal government “will continue to do everything we can to make housing more affordable for Canadians from coast to coast to coast.”

Increasing the city’s stock of rental housing has been a key part of Toronto’s housing strategy as well.

City council recently passed a housing plan put forward by Mayor Olivia Chow.

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