Designed by BTP Architects, the mix of 12 three and four bedroom family homes are expected to be complete by December 2018.
The £2 million scheme is being built by M&Y Construction and Maintenance on behalf of Regenda Homes.
Sue Ward, Development Project Manager at The Regenda Group, said: “We are delighted to start work on these much needed family homes in Rochdale.
“Our neighbourhood team confirmed a high demand for larger units within the local area, and we have worked closely with Rochdale Council to address the shortage.
“We look forward to seeing the scheme progress over the next nine months.”
Gill Kelly, Managing Director at M&Y Maintenance and Construction, said: “This is a great scheme which will deliver high quality, affordable homes to families in Rochdale.
“We’re looking forward to starting construction work on this new development.”
Councillor Neil Emmott, Portfolio Holder for Housing and Environment at Rochdale Council, said: “The council is delighted that work is beginning on more high quality affordable rented homes, particularly larger homes suitable for local families.
“This development will make a valuable contribution to delivering the affordable housing that Rochdale needs, as well as regenerating vacant brownfield land.”
The development at Ramsey Terrace has received funding from Homes England and will be available to rent through Rochdale Boroughwide Housing's choice-based lettings scheme.