Thirty five housing projects are being considered for infrastructure funding from Kāinga Ora.
The $1 billion contestable Infrastructure Acceleration Fund (IAF) was launched last year to help councils fund projects that will enable housing development in areas of need.
Kāinga Ora general manager of the commercial group Caroline McDowall said it could unlock crucial housing of up to 35,000 dwellings.
Just under half of the projects are in New Zealand's biggest cities - Auckland, Hamilton, Tauranga, Wellington, and Christchurch.
Almost a third of the applications are proposals that are co-led with Māori or have Māori as key partners.
Following a process to evaluate both initial expressions of interest and full responses to request for proposals, 35 proposals have now been invited to enter the final stage of the IAF process.
This stage will see further due diligence undertaken and both funding and housing outcome agreements negotiated before funding can be confirmed.