The Birmingham City Council on Tuesday approved a $400,000 loan agreement to help rehabilitate four houses in East Lake as a way to increase the amount of low-to-moderate cost housing available in the neighborhood.

The rehabilitation work will be done by Own It Property Solutions, which has agreed to use the proceeds from the sale of the houses to rehabilitate other homes on Fourth Avenue North in North East Lake near East Lake Park.

“It’s a beautiful, beautiful location to build housing,” said City Council member J.T. Moore. “I definitely want to see more of this done.”

The city will loan $400,000 towards the total project cost of $600,000. After the houses are sold, Own It Property Solutions will determine how many more homes can be rehabilitated from the proceeds.

The homes were purchased for amounts ranging from $5,000 to $11,000 to $30,000 and will require various amounts of work, said Cory Stallworth, senior director of commercial development for the City of Birmingham.

The homes are expected to sell for between $160,000 to $200,000, he said.

The revolving loan fund could be used to redevelop other areas, Stallworth said.

“This is a smaller project that we actually want to mimic in other areas,” he said. “We have some other developers that are interested in doing the same thing in other communities.”