The £1.7m project has seen the conversion of a disused office building in Catford, south east London into five mews houses.
The lender says since launching, its development finance team has expanded beyond the South East and now has sales representatives in both the Midlands and the North of England.
Fintan O’Riordan, development finance director at Paragon Bank, said: “Progress on this development has been excellent and it is great to see the first loan we approved now delivering homes. Small scale builders and developers have an increasing role to play in helping deliver the housing the country needs, and development finance is key to facilitating this.
“It has also been fantastic to assist a highly experienced developer on this project. Our business is based upon developing meaningful relationships with experienced developers.”