Massachusetts is pouring an additional $86 million into creating 260 new workforce housing apartments and 500 homes for moderate-income, first-time buyers.

The investment, announced today by Gov. Charlie Baker and Lt. Gov. Karyn Polito, will allow MassHousing to expand its workforce housing program and develop new homes to increase first-time homeownership opportunities. As part of the $86 million boost, $60 million has been committed to create roughly 500 new workforce homes that will be affordable and accessible for moderate-income, first-time homebuyers. The remaining $26 million will support the creation of roughly 260 new workforce housing rental units.

“Access to adequate, affordable housing is critical to the growth of our communities and the families that comprise them,” Polito said in a statement. “Gov. Baker and I will continue to draw upon every tool at our disposal to promote housing options for residents, and look forward to using today’s new funding to help more families buy their first homes and lay roots in their neighborhoods.”

Launched in 2016, MassHousing’s Workforce Housing Initiative supports the development of homes for middle-income households who struggle to meet high housing costs, but do not qualify for traditional affordable housing. Since then, the agency has committed or closed workforce housing financing totaling $73.4 million to 31 projects in 16 communities across the state, making the Workforce Housing Initiative the largest state-level middle-income housing program in the United States.

“This substantial new state commitment will build on that success, opening new homeownership opportunities for Massachusetts workers, while also creating hundreds of new workforce housing rentals. It will advance our efforts to close the state’s racial homeownership gap and unlock sustainable, inclusive economic growth,” MassHousing Executive Director Chrystal Kornegay said in a statement.

Greater Boston is one of the toughest markets in the nation for first-time homebuyers, with statewide year-to-date single-family and condominium median sale prices trending ever-upward – $385,000 and $370,000 as of May 31, respectively, according to The Warren Group, publisher of Banker & Tradesman. Many area Millennials, who make up the bulk of first-time buyers, are pessimistic about their ability to buy a home, a recent study found.