A £1.2m scheme to build affordable housing may be agreed by councillors next week.
The scheme is part of a housing strategy being developed by Hambleton District Council.
Officers have put forward proposals to build 35 homes in the area - 14 houses and flats in Thirsk, and seven houses each in Northallerton, Topcliffe and Easingwold - in partnership with Broadacres Housing Association.
Lower cost housing was one area criticised in the council's recent Comprehensive Performance Assessment of the council.
Hambleton received the highest possible rating, but inspectors found that the council was "not achieving its targets in affordable housing".
Officers are developing a a strategy to tackle the issue.
But the council's director of planning and environmental services, Steve Quartermain, warned: "The implementation of the strategy, however, brings a risk that the finances spent will not bring optimum benefit in the community."
The 35 planned houses and flats would cost nearly £1.2m - more than the £1m budgeted by the council for affordable housing schemes.
A report on the plans will go before councillors on Tuesday. It states: "The ability of people to access the housing market has been a key driver of both past housing strategies and the district-wide Local Plan.
"The total grant required for all these schemes is £1,199,650, which exceeds the Hambleton District Council funds available.
"However, as additional funding might be forthcoming, and the feasibility of each project needs further work, it is recommended that the programme be agreed in principle subject to further reports on the details.
"This would not only demonstrate an immediate outcome, but would potentially improve our performance in housing services against our objectives for dealing with homeless persons."
If the scheme is agreed in principle, the agreement could be the basis for Hambleton to seek funding for the schemes from North Yorkshire County Council and the Housing Corporation.
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