Social housebuilder Contour Homes is building 19 three-bedroom homes for general rent in Farnworth, Bolton.
The £2.4m development on Edith Street received a £1.3m grant from the Homes & Communities Agency.
Nicky Harris from Contour Homes said: "The impact of the recession on the property market means there is more need than ever before for high quality homes to rent. This new scheme will go some way to alleviating waiting lists in this area."
Rowlinson Construction has started work on site and completion is due in January 2010.
Contour Homes is a subsidiary of Contour Housing Group which is one of the region's largest registered social landlords, with 20,000 properties under its ownership and management across 27 local authorities.