CHAPEL HILL - The Inter-Faith Council for Social Service announced a major chunk of funding for its new men’s homeless shelter last week.

The N.C. Housing Finance Agency approved the IFC’s application for up to $600,000 in financing for construction of the new Community House Transitional Housing Facility, at 1315 Martin Luther King Jr. Blvd. The loan does not have to be paid back for 50 years and it could possibly be forgiven altogether, IFC executive director Chris Moran said Thursday.

The new shelter will provide 52 beds of transitional housing for homeless men and 17 cots for emergency shelter on severe weather nights or for men with health problems. It will replace the current men’s shelter in a town-owned building at the corner of Columbia and West Rosemary streets downtown.

The loan brings IFC fundraising to nearly $2 million of the Community House Capital Campaign’s $5,635,000 fundraising goal, Moran said.

The goal total includes $1 million to pay off the mortgage on the agency’s Main Street building in Carrboro, as well as money for a contingency fund to cover unforeseen construction expenses, he added.

The IFC can actually start construction on Community House once it raises about $2.6 million more, Moran said. He hopes to put the project out for bids in fall 2013 and begin construction the following spring.

“The new Community House will be a residential program that will offer a continuum of support services, restore lives and help homeless men become productive citizens,” Herb Paul, president of the IFC’s board, said in a statement. “This support from the N.C. Housing Finance Agency is a testament to the thoughtful work done by IFC staff and the building design team, in developing an innovative program and the facility to support that program.”

The IFC also received a Community Development Block Grant of $100,000 from the Town of Chapel Hill. The money will be used to obtain the zoning compliance permit later this year.

In addition, a local foundation recently issued a $100,000 challenge to the IFC encouraging its supporters to match the foundation’s gift for the Community House Capital Campaign.

With more than $2 million to raise before building, Moran was asked why he announced the funding this week.

“This loan enables us to say to the community that funders are beginning to step forward to support the project,” he said.

The new shelter has been controversial, with some neighbors in its northern Chapel Hill location saying they already house more than a fair share of shelters, transitional housing and group homes. They have expressed the greatest concern about the overnight beds that will house men who are not part of the ongoing shelter program.

Moran said the IFC remains willing to let someone else provide emergency housing in the Chapel Hill-Carrboro area but that no one has offered to do it.