Barratt is to build 153 homes in the Midlands and North-west after becoming the first private housebuilder to clinch direct funding from the Housing Corporation.
The contract to construct subsidised affordable homes is worth £4.37 million to the company and is the first awarded direct to the private sector rather than through registered social landlords, chiefly housing associations.
A spokeswoman for Barratt said the new homes were located at six schemes in the Midlands and Northwest, including sites at Wednesbury, Willenhall and Coventry.
The Housing Corporation said that eight other deals with private house builders are due to be signed shortly, producing between 3,000 and 4,000 directly commissioned homes over the next few years.
Housing Corporation chairman, Peter Dixon said: "This is an historic day for the corporation.
"From a standing start a little over a year ago, we have successfully created a new market in the supply of affordable housing. We will be able to build on the impressive record of housing associations in providing good quality housing - while drawing on new sources of expertise and innovation in the commercial sector.
"We see this as the start of a long term relationship with the company which I hope will see us build many homes together.
"And this is just the start. In total nine private developers are set to receive funding from the Housing Corporation. We hope to make further announcements shortly."
Barratt Homes chief executive, David Pretty said: "As one of the pioneers of social housing partnership development in Britain, Barratt has become the leading provider of affordable social housing."
The Barratt package will include homes for rent, for sale and for low-cost ownership.