Parish councillors in Woodhall Spa confirmed they are supporting an application to build 31 new houses in the village.
The development is on land adjacent to the Community Centre on Alexandra Road, subject to final approval from East Lindsey District Council.
Parish councillors have recommended construction should not start until all drainage and sewerage issues have been resolved.
Residents have previously raised concerns about the development.
Meanwhile, councillors are hoping to have discussions with their counterparts on Roughton Parish Council about a separate bid for a housing scheme at Bachelor Farm, Horncastle Road.
There is some debate about which parish the actual site for the proposed development is situated in.
Meanwhile, work has started on the re-development of a caravan amenity block in Jubilee Park.
Asbestos has been removed and the entire project is due to be completed by March 14, at a cost of more than £100,000..
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Weather for Horncastle
Wednesday 19 June 2013
Temperature: 12 C to 23 C
Wind Speed: 13 mph
Wind direction: North
Temperature: 12 C to 17 C
Wind Speed: 12 mph
Wind direction: North east