A $22.8 million financing package announced by the state on Thursday will create 23 new affordable apartments in Cambridge while helping to upgrade 65 existing housing units, which will also keep their affordability restrictions.

MassHousing said it had closed on the financing for the 88-unit development that will be known as Squirrelwood.

Seventy-eight units will be for households earning at or below 60 percent of the area median income and the other 10 will be for households earning at or below 100 percent of area median income — $113,000 a year for a family of four in Cambridge.

The nonprofit Just-A-Start Corporation is receiving an $8.2 million permanent loan from MassHousing, a $13.6 million bridge loan and $1 million from the agency's $100 million workforce housing initiative. The deal creates affordability protections on 45 units at Linwood Court with expired Section 13A affordable housing financing that were at risk of converting to market rates.

Callahan Construction Managers is the contractor on the project; the architect is Davis Square Architects.