"The high number of second homes can be a frustration for many who struggle to find an affordable home in their community."
The Community Housing Fund aims to help local groups deliver affordable housing aimed at first-time buyers in response to the problem second homes can cause in reducing supply.
One third of the funding - almost £20 million - will be allocated directly to local authorities in the South West as this is the most popular region for second homes in England, accounting for 21% of all second homeownership.
The Government says second home ownership in England is at an all-time high and is crowding out first time buyers and causing a shortage of available properties.
The first year of funding will be used to build capacity within local groups such as improving technical skills, setting up support hubs to offer advice, business planning and providing staff to review local housing needs.
Funding the following year must then be used to deliver housing on the ground for local people.
Housing Minister, Gavin Barwell, said: "The high number of second homes can be a frustration for many who struggle to find an affordable home in their community.
"This new fund will help tackle that by boosting supply and make sure community groups are at the heart of delivering new homes so that this is a country that works for everyone.
"I saw for myself the great work community land trusts do on a recent visit to Cornwall and we want them to do much, much more."
Catherine Harrington, Director of the National Community Land Trust Network, added: "We are delighted that the government is backing community-led housing with this new fund. Every few days a new community-led housing provider forms to take housing into their own hands, providing homes that are affordable to local people. This fund could triple the 3,000 homes that Community Land Trusts alone already have in the pipeline.
"We are now looking forward to working with local authorities to help them use the funding in the way it is needed most and develop a strong community-led housing sector in their area."
