The state housing division has granted $3.1 million for an assisted living facility and low-income housing project that the Colorado Coalition for the Homeless plans to build on what is now the parking lot next to its Stout Street Health Center.

The Colorado Department of Local Affairs announced the grant on Friday. In a presentation to the State Housing Board earlier this month, the Colorado Coalition for the Homeless described building the nine-story, $35 million project on a Five Points parking lot it owns. On the first three floors will be the 75-bed Stout Street Recuperative Care Facility for people experiencing homelessness who have been hospitalized and need a place to continue their recovery.

Cathy Alderman, vice president of communications and public policy for the coalition, said that while the development had been in discussion before the coronavirus hit Denver, the pandemic has “illuminated the need” for shelter for people who are experiencing both housing and health crises. Denver has few such places, none linked to a clinic as the Stout Street Recuperative Care Facility will be, Alderman said in an interview.

“That’s what’s really big about this, is that we have direct connection to Stout Street” clinic, Alderman said.

The rest of the complex will have 98 apartments, 28 of them for people earning no more than 30 percent of the area median income — for a single person, that is currently $21,000 a year. The other units are for people earning no more than 60 percent AMI, now $42,000. Supportive services to help people stay housed will be offered on site.

The project was awarded tax credits under a key federal program that helps finance housing that can be rented below market rates. City and donor funding also has been sought, and a land transfer to the Denver Housing Authority will also provide cash for the project.

The coalition is hoping to break ground by year’s end and move people in in 2022, Alderman said.