The deal, which was advised by Chartmead, covers a 57-property scheme of one and two-bedroom apartments.
The funding enabled the refinance of the freehold of the site at Brook Road, Redhill in Surrey and also supports the build costs to complete the project (pictured), estimated at £6.5m.
It is the first deal Mulberry has completed with Paragon and it expects to complete the project in spring 2022.
Steve Mountain, senior relationship director at Paragon, said: “It is great to be able to support Mulberry Homes with funding for this scheme.
“Over the past few months, it has been our priority to support both new-to-bank and existing clients, so we are pleased that we are able to begin building our relationship with Mulberry through assisting with this development.”
Stewart Penney, director at Mulberry Homes, added: “The support from Paragon has been vital in enabling us to continue with the development of the site, of which we obtained planning permission for twelve months ago.
“The development will bring more much-needed housing within easy reach of London.”