But the council claimed the level of funding was too low to tackle the shortage of rented accommodation exposed in their housing surveys.
Council leader Sheila Gilmore argued that an extra £5m should have been allocated to the Scottish capital.
Old Town Housing Association will now transform Edinburgh's Candle-maker Row into affordable housing.
Three years ago the street was the subject of controversial plans to build a new 20-bed hostel for homeless people.
The funding will also support the construction of 48 homes by the Port of Leith Housing Association.
A further 25 homes will be constructed in Drylaw by Muirhouse Housing Association.
l Communities Scotland is investing £18m in housing and regeneration projects in the South Clyde areas of Inverclyde, Renfrewshire and East Renfrewshire this year.
The investment should attract a further £11m from the private sector, and help to complete 370 new and improved homes and allow work to start on another 380.
Source
Housing Today
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