The city is set to receive more than £2.5 million for building new houses.
Mark Lancaster and fellow MK MP Iain Stewart welcomed the £2,513,998 given to Milton Keynes Council under the New Homes Bonus scheme this year.
Until now, increased housing in communities has meant increased strain on public services and reduced amenities. The New Homes Bonus will remove this disincentive by providing local authorities with the means to mitigate the strain the increased population causes.
It will match fund the additional council tax raised for new homes and properties brought back into use, with an additional amount for affordable homes, for the following six years.
Mr Lancaster sees the scheme as his six-year campaign for 'infrastructure before expansion' coming to fruition.
He said: "This is fantastic news for Milton Keynes. This money really will provide infrastructure to take the strain brought on communities by expansion, which encouraging us to build more affordable homes. Coupled with devolving planning powers to local communities, this will mean we get the right housing, at the rate right in the right places in Milton Keynes."
Mr Stewart added: "I warmly welcome this good news. This money could be used to address the city's increased demand for affordable housing but also importantly, it could help provide the right infrastructure such as play areas for children and adequate parking areas which residents have often voiced concerns about."
Both MPs have pledged to monitor the spending of the funds to ensure they are spent across the city for the purpose of encouraging and supporting house building.