Brighter Horizons, the charitable development subsidiary of Rochdale Boroughwide Housing, has started work on 36 new homes in Kirkholt.
Clare Tostevin, head of new business for RBH, said: "The new build is a vital part of the overall masterplan for this Housing Market Renewal Initiative neighbourhood and will help encourage further investment in the area from the private sector."
In the first phase, Brighter Horizons, supported by Great Places Housing Group, will develop six two-bedroom bungalows on the site of former garages. This phase was funded by a £420,000 grant from the Homes & Communities Agency and borrowing by Brighter Horizons. The bungalows will be for older people and have parking spaces and gardens.
"This is the first new build on Kirkholt for some years," said Tostevin. "It demonstrates confidence in Kirkholt as a neighbourhood where quality new homes can be delivered."
Brighter Horizons will continue with phase two of its new build plans early in 2011 when it will start work on the development of 30 new homes for sale and affordable rent. The HCA awarded £1.9m for the second phase.