The Island Housing Trust was awarded $3.8 million in financing from MassHousing this week, nearly closing the gap needed to complete the affordable and workforce rental project in Tisbury known as Kuehn’s Way.

The long-planned modular home development, located on a 15-acre site across from the Assembly of God church on State Road, is scheduled to open next April, providing housing for 20 lower and moderate-income households. It is the largest affordable rental housing development on the Island in 15 years.

IHT executive director Phillippe Jordi said Wednesday that foundations have been poured, utilities and septic systems are being installed and the modular units are being assembled in Maine prior to transport to the Island.

The Kuehn’s Way project is expected to cost $10.3 million, much of which had already been committed from various sources, including $1.6 million in local Community Preservation Act funds, $2 million in state and federal financing and $2.3 million in donations, Mr. Jordi said. The $3.8 million from MassHousing leaves just $400,000 that still needs to be raised, he said.

“The costs keep going up, and just getting subs and materials has been so challenging, but so far we’ve been able to make it happen,” he said.

MassHousing — short for the Massachusetts Housing Finance Agency — has previously provided financing for other IHT projects, including the nine-unit Scott’s Grove development in West Tisbury and Perlman House, a former inn on the Edgartown-Vineyard Haven Road in Tisbury that was converted into a seven-unit, mixed-income apartment complex.

A quasi-public agency created to provide financing for affordable housing in Massachusetts, MassHousing raises capital by selling bonds and lends the proceeds to low and moderate-income homebuyers, homeowners and qualified developers.

Mr. Jordi said MassHousing executive director Chrystal Kornegay visited the Island Monday to offer financial as well as technical support to IHT, town housing officials, employers and lenders in addressing the critical shortage of affordable housing on the Island.

“The need for affordable housing is so great, and we know that it is challenging for towns to really manage these opportunities,” he said.

Mr. Jordi cited figures from the Martha’s Vineyard Commission’s recent housing assessment report showing that at least 600 year-round houses have been lost to seasonal or short-term rental use in the past 10 years.

“The challenge is that much as we try to make some headway, we’re also battling the market. You have investment property owners and second homeowners who are buying up these properties, and they will more than likely never go back to year-round housing,” he said.

Kuehn’s Way will consist of three one-bedroom apartments, 14 two-bedroom apartments and three three-bedroom apartments. Two apartments will be restricted to households earning up to 30 percent of the area median income (AMI). The remaining 18 apartments will be workforce units restricted to households earning up to 80 percent of AMI. The AMI for Martha’s Vineyard is $104,700 for a household of four. KBS Builders Inc., of Maine, will construct the modular housing units and deliver them to the Island. CapeBuilt Construction is the general contractor.

The architect is LDa Architecture and Interiors and the management agent is the Dukes County Regional Housing Authority.

The Island Housing Trust is a nonprofit organization committed to creating and sustaining permanently affordable housing, both rental and owned.