LONDON, ONT. -- The federal government will be providing a significant cut of the funding needed for the City of London’s modular housing strategy.

The Rapid Housing Initiative allocation for London will be $7.5-million.

That represents more than 40 per cent of the cost for one of three modular buildings offering ‘transitional housing’ and support services for Londoners exiting homelessness.

A vacant lot at 122 Baseline Rd. W. is the first site chosen where a four-storey, 61-unit building will be constructed by Ellis Don with pre-fabricated components and assembled on site, speeding up the construction process.

The building comes with an estimated cost of $17 million, which is to be largely funded by federal and provincial programs.

City Hall is still reviewing undisclosed properties for two similar buildings.

The funding was formally announced Wednesday morning.

At the announcement was Kate Young, Member of Parliament for London West, Peter Fragiskatos, Member of Parliament for London North Centre and Ed Holder, Mayor of the City of London.