A Waltham developer is using government tax credits and financing from Bank of America to add 120 units of affordable housing in Barnstable.

Dakota Partners broke ground recently on the first phase of Village Green, a two-building complex on Independence Drive. Total projects costs, including land acquisition, are $16 million, said Roberto Arista, president of Dakota Partners.

The company gained approval through Chapter 40B, the state’s affordable housing law that enables developers to build multi-family projects in zoning districts that normally would not allow them. Dakota acquired the property from a previous developer who had planned to build market-rate rentals but was unable to move forward during the real estate downturn.

Dakota Partners applied for and received $10 million in federal low-income tax credits and $1.8 million in state tax credits. Bank of America provided $10 million in construction financing.

To control rising construction costs, Dakota is using modular units delivered from Maine, Arista said.

Rents range from $811 for one-bedroom units to $1,100 for three-bedroom units.

The first phase consists of 60 units in two three-story buildings. A second phase, also with 60 units, is expected to begin in 2015.

Dakota has built seven affordable housing projects in Massachusetts and New Hampshire in recent years, all financed by Bank of America. It’s next moving forward with a 72-unit project planned on West Lowell Avenue in Haverhill, with a closing expected by year’s end.