Up to 45 houses will be built in the Goulburn and Ovens valleys for people struggling with housing affordability.
In what has been hailed as one of BeyondHousing's "greatest" philanthropic achievements, the Peter and Lyndy White Foundation is putting up $10 million for the one- and two-bedroom dwellings.
BeyondHousing will own and manage the homes, which will provide housing for about 100 people.
Chief executive Celia Adams said the housing must be delivered swiftly and efficiently.
Ms Adams said it was a "massive" project to address Shepparton's homelessness crisis.
“We know singles and people who require two-bedroom accommodation are on the largest waiting lists,” she said.
“If you're on Newstart or a youth allowance you simply can't afford what's available right now, so someone has to develop it.
“For an investor there's not a lot of income to be made for renting a one-bedroom dwelling; but we're not investors, we're a not-for-profit.
“We need to make sure the money that's available in the partnership is delivering as much housing as we can; that's sustainable, affordable and close to amenities.”
Ms Adams said the houses were not crisis accommodation but "safe, secure long-term housing".
The one-bedroom homes will include a spacious kitchen, European laundry, walk-in-robes and one off-street car park.
As a bonus for the Goulburn Valley, Ms Adams said the houses would be built using local trades.
“Local trades, contractors and builders is who we'll use,” she said.
“We have really good relationships with local builders and we'll always look for more if they can deliver an affordable quality product.”
Ms Adams said the best defence against homelessness was employment.
“It's important for us as part of this community to make sure we're supporting the community and our contractors and builders in that process.”
The Peter and Lyndy White Foundation and BeyondHousing have previously partnered to build smaller dwellings in Wangaratta.
“The Peter and Lyndy White Foundation is proud of our significant partnership with BeyondHousing to deliver safe, affordable and efficient housing for vulnerable Victorians,” Mr White said.
“We are committed to increasing the supply of affordable housing in Victoria, and we look forward to working with BeyondHousing, to make a positive impact in regional Victoria by increasing the availability of social housing.”
BeyondHousing will also provide a financial contribution to the new homes.
Two sites in Shepparton have been secured for the houses and work is expected to start soon.