Funding of £5m was initially pledged to faith-based groups whose work promotes understanding and dialogue between religions.
But Paul Goggins, Home Office minister, announced the extra money last week while unveiling the first 578 successful applications, bringing the total value of awards so far to £7.5m.
Goggins also revealed that the Home Office would make another £5m available in the second round of bidding, which is due to open in July.
Harriet Crabtree, deputy director of the Inter Faith Network for the UK, welcomed the announcements as an "excellent move to support interfaith work and community cohesion".
She added: "It will help faith groups develop their capacity to work with central, regional and local government, and with others, in practical ways that can contribute to social wellbeing."
The fund has two key priorities: capacity building and interfaith activity.
The aim of funding capacity building is to strengthen groups' organisational capabilities so that they can play a fuller part in civil society and community cohesion and engage more effectively with public authorities.
A total of 2,128 bids were submitted in the first application round.
Of the 578 successful applications, 175 are for large grants up to £50,000 and 403 for small grants up to £5,000.
Successful bidders from the first round include TheFaithworks, a Manchester-based Christian organisation, Luton Council of Faith, an interfaith organisation, and Leicester's Fatima Women's Network, which is establishing a regional Muslim women's forum to link to other faith communities.
An assessment panel made up of representatives from Jewish, Hindu, Sikh, Muslim and Christian communities, as well as interfaith bodies, recommended the projects be approved.
The Community Development Foundation was commissioned by the Home Office to administer the distribution of funds.
Interfaith activity is designed to bring people of different faiths together in a bid to promote mutual understanding.