It could also be the model for other Aboriginal housing programs in the state, proponents say.

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The NSW Aboriginal Housing Office (AHO) has tasked Gunida Gunyah Aboriginal Corporation with running a transitional housing program, for local Aboriginal people in immediate need of shelter. The AHO is funding the first three years of the program.

Gunida Gunyah chief executive officer Jane Bender said many locals who were in need of housing were stuck on waiting lists, so the program would address that.

"As a housing provider, we have a very large waiting list in Gunnedah, and we know that people on the waiting list are actually on the Homes North waiting list as well," Ms Bender said.

"So there's a huge need for that in between stuff, and a huge need for supported tenancy.

"We've had a lot of people come to us over the years and say ... 'when everything falls to pieces, there's nowhere to stay'."

These people may be homeless or unable to obtain a home by their own means; have been recently released from prison; are younger in age; have mental health needs; and/or are at a critical time of need.

Ms Bender said the program was in three stages, with the first running for about 16 weeks.

The client would be set up in a fully-furnished spot, but would still pay rent.

"We'll build a case management plan, address the needs that will be taken care of, and identify why this person can't sustain a tenancy or get their own property," she said.

"After the 16 weeks, the plan will be built and they'll go into another property, get their own furniture, and we can link them to agencies that can assist.

"They'll still be very heavily supported, but with the intent that they're building up a rental ledger, they're learning how to care for a property properly, and then after six-12 months, we can sign that lease over to that person or get them into a longer-term social housing property."

At the end of the program, a client should be able to maintain sustainable housing, meet their financial obligations, meet their family obligations, make significant progress against their personal well-being goals, and access the support services they require.

Ms Bender said she was particularly excited to help younger people in the town.

"If you've got a young kid, say 17 or 18, that's totally disconnected from their family or can't live with family, where do they go in our region? They can't get private real estate, they can't get community housing, so where do they go?" she said.

"This way they'll be able to build themselves up a rental history, and will be able to give a legitimate rental history to say that 'this person maintained the property really well, never missed a rental payment' and can move into the private property market."

The chief executive officer said the program was about five years in the making, and hoped that the first client would be housed in September.

"The AHO will then have a model for the state, and it's something for Gunnedah to be really proud of. In the Aboriginal housing sector, we're being used as a pilot, to model new changes in the AHO," Ms Bender said.

"It's a good thing for Gunnedah. It's good for everybody around."