Work can resume at Contour Housing Group's Primrose Village scheme in Ribble Valley after £1.12m grant funding was released by the Homes & Communities Agency following review.
Contour Housing will provide 25 new affordable homes, 12 of which will be offered under HomeBuy Direct shared ownership and 13 will be social rented properties.
The scheme stalled in the recession and the HCA confirmed kickstart funding but the decision was delayed following the Budget cuts. Contour Housing Group will provide the remaining funding of this £3m development.
Deborah McLaughlin, North West director of the HCA, said: "We have worked closely with Ribble Valley Borough Council to make sure this important housing scheme gets moving. There is a good mix of new housing for people who want to buy or rent and I'm sure local people will be delighted to see these new high quality homes developed."
Nicky Harris, project manager for Contour Housing, added: "The council has identified the need for affordable housing throughout the borough. It recognises how the availability of such housing impacts on the retention of skills in the borough and has a major influence upon the local economy and quality of life.
"Our research suggests that these are much needed properties in an area where many local households are being priced out of the market and therefore forced to leave the area. These new homes will help to alleviate that situation."
It is anticipated that work on the new homes will start in November with properties being available in January 2012.