The new development in Clun will be made up of two- and three-bed houses, half of which will be sold as shared ownership while the rest will be rented out.
South Shropshire Housing Association has applied to Shropshire Council for permission for the scheme, saying there are people in the town in housing need.
Its planning statement said: "Shropshire Homepoint data supplied by the Shropshire Council Housing Enabling Office identifies housing need in the area indicating that there are currently 17 persons/families on the waiting list for properties in Clun with evidence of a local connection in the area.
"The Shropshire Council Housing Enabling Officer recognises that there will also be hidden demand in the village once the development has started.
"Our aim is to provide a quality housing development that addresses the needs of the village and encourage a sense of well-being and belonging in their communities.
"The house types will provide two and three bedroom options for people in need of affordable housing from single occupants to families.
"As the applicant, South Shropshire Housing Association currently own and manage properties around Clun and are familiar with the area."
The site is located on Castle Street, and the housing association said the development would "meet the need for affordable housing and local demand."
It added: "A safe and satisfactory means of access can be provided into the site, off the highway. Layout of the development is in keeping with the style and character of the neighbouring residential areas."
The application will be decided once responses have been received from consultees. Members of the public can also comment.