Financier International Housing Solutions (IHS) has received $175million (R1,3billion) to build 30000 affordable housing units.
IHS said the funding from its South Africa Workforce Housing Fund came from the US and local investors, and would be used to develop houses valued between R280000 and R650000.
The fund was created to invest in housing for rent and sale to low and moderate-income families.
The housing department has a 2,3million housing backlog, and some of the applicants are believed to be on the list because they cannot afford adequate housing.
A R42billion public private partnership was formed by banks and government four years ago through the Financial Services Charter to create affordable housing stock.
IHS country director Elize Stroebel said in addition to funding developers to create affordable housing, the organisation was also funding the creation of affordable rental stock in the country.
She said the financial injection from the US proved that international investors had faith in the potential for growth in the residential housing market.
"The investors see SA as a good investment and realise they have the potential to gain good returns from developments," she said.