Councils in Lincolnshire will get a £10.4 million New Homes Bonus from the Government, Housing Minister Mark Prisk said.
County and district councils will be able to share the funds, taken from a pot of £66 million as a reward from building new homes, with a number of those affordable homes.
In Lincolnshire, 2080 new homes have been built in the past year, including 665 affordable properties. Of those 2080, 333 were built in Lincoln, with 40 marked as affordable housing.
The provisional funding will be paid to councils in the 2013-14 financial year. Around £1,174,957 will go to the City of Lincoln Council.
Projects for new affordable housing include five council homes on Wellington Street, which are almost complete, and 20 more on Mendip Avenue in North Hykeham.
The City of Lincoln Council plans to have 50 new council homes in the city by 2020.
Housing Minister Prisk said: “For years, developers found themselves at loggerheads with communities unconvinced that their plans for growth would benefit them. But the New Homes Bonus is turning this around.
“The £1.3billion paid out to councils to date has meant that now local people are able to see the rewards of new developments in their area – paving the way for thousands of much-needed, locally-supported homes to be delivered across the country.”