Chester & District Housing Trust is in talks with Cosmopolitan Housing Group in Liverpool to create an organisation with combined assets of £875m and 12,500 properties across West Cheshire, Merseyside and the North West.
Residents are being consulted about the proposal and preliminary discussions have been carried out between board and resident board members of both housing associations.
John Denny, chief executive of CDHT, said: "There is a great fit between both organisations. This merger would create further opportunities for residents, maintaining and improving services; together we are stronger in what we predict will be a challenging financial climate in the immediate future. By working together we can put more homes on the ground by combining our development budgets, as well as safeguarding and creating jobs with no increase in rent payments, so it is a win-win situation which allows for more growth."
Geoff Redhead, Cosmopolitan Housing Group chief executive, added: "This is exciting news for everyone. Discussions will continue over the coming months with residents, Board members, colleagues and key stakeholders to look at the best way to maximise the combined expertise and efficiency of our organisations, whilst ensuring that our services to customers and relationships with stakeholders are not disrupted in any way."
Chester & District Housing Trust's 6,500 homes span Blacon North, Blacon South, Chester, the rural communities, Lache and Handbridge, Upton, Hoole, Newton and Plas Newton.
Cosmopolitan Housing Association owns and manages 2,500 homes and 3,500 student homes in Liverpool, Knowsley, Sefton, Wirral, Halton, West Lancashire, Warrington, West Cheshire and St Helens.