A council is planning to lend £6m to housing associations to tackle a shortage of rental homes.
South Lakeland Council wants 1,000 properties to be built by 2025 to meet demand and wants to kick-start building by offering low-interest finance.
Recent research carried out on behalf of the council found that 320 homes needed to be built in South Lakeland every year to meet demand.
A cabinet meeting will decide whether to approve the plan later this month.
Councillor Jonathan Brook, portfolio holder for housing and innovation, said: “The loan facility would allow housing associations to access low-interest rate finance from the council, removing an obstacle which may be preventing them from developing more affordable housing in the area.
“The council would receive a financial return from the repayment of the loans and also be fulfilling our pledge to work with partners to deliver the new affordable homes which our communities need.”