Peakhill Capital and Z Modular have closed on the first federally backed modular-apartment construction loan in Canada, the companies announced.

The Canada Mortgage and Housing Corporation insured Toronto-based Peakhill’s $26-million loan to U.S.-based Z Modular, which has offices in Toronto and Kitchener, Ont. Peakhill said CMHC’s support for the deal will create more opportunities to finance more modular builds in the future.

Z Modular will use the loan to finance the construction of a pair of four-storey apartment buildings in Lucan, Ont. Known as Fuze Lucan, the two buildings will contain 90 units in total.

“Following construction of the GEM Residence at St. Clair College’s Windsor campus, Fuze Lucan is our second project in Canada, and we’re looking forward to working with Peakhill Capital on this and future projects,” said Mickey McNamara, Z Modular’s president, in a news release.

Peakhill will also finance a second modular property with Z Modular. The Canadian company has committed to launch a housing impact fund in 2024.