Ministers are hoping a £100 million boost to small builders will aid the construction of 2,000 new homes.
Housing Minister Brandon Lewis said the money, half of which will come from the Government to match the £50 million pledged by Lloyds Banking Group in October, would "keep the country building".
The Housing Growth Partnership is expected to make around 50 investments alongside small builders in new developments, providing money for their businesses in an effort to boost housebuilding.
It will also establish a network of builders to act as mentors to firms looking to expand.
Mr Lewis said: "The 2008 economic crash devastated our army of small builders, with delivery falling from 44,000 homes to just 18,000 – seven years on, companies are getting back on their feet but we're determined to give them all the help they need.
"Access to finance is one of the biggest challenges they face – so that's why today I'm launching this £100 million commitment which will help our smaller builders fund new projects, expand their businesses, create more jobs and build more homes.
"With housing starts at a seven-year high and climbing and homes granted planning permission at 261,000 – the highest since 2007, this work will ensure we maintain this momentum and keep the country building."