Druridge Crescent in Horsley Hill will see 20 two-bedroom bungalows built up, thanks to a grant totalling £803,000 from the Homes and Communities Agency (HCA).
The organisation is also working to support other housing projects in South Tyneside and earlier this week confirmed cash donations for more than 750 properties in Yorkshire and the Humber.
Further monies have been forthcoming from South Tyneside Council for the initiative, which has been designed with the over-60s and others in need of ground-floor accommodation in mind.
"The new homes will be ideal for downsizers who want a smaller home in their own community and will also free up larger houses for local families," said head of area with the HCA Brian Peel.
Posted by Jude Whitehouse