The NSW Land and Environment Court endorsed the recommendations following mediation in December, which included limiting social housing to six of the 10 units to meet demand.

Social housing tenants, or those who cannot access housing in the private market, would also be limited to 55 years or older.

The remainder can be occupied by affordable housing tenants, of any age, for 80 per cent of the median market rent.

The conditions would expire after 10 years and changes would require another application.

According to Commissioner Sarah Bish's judgement, the parties agreed issues raised by objectors had been resolved.

"The parties agree that the amended plans address any potential adverse impacts as they relate to visual, traffic, noise and parking. There are no amenity impacts, including privacy, solar access or acoustic that should result in the refusal of the DA," the judgement said.

A Housing Plus spokeswoman welcomed the decision.

"As a complying development and one that had initially received approval by Orange City Council Housing Plus had no option but to lodge an appeal with the Land and Environment Court in October," she said.

"To avoid lengthy and costly legal expense, we negotiated an agreement with Orange City Council over the past months."

She did not comment on construction timeframes.

Councillor Kevin Duffy, who opposed the development in the chamber, was disappointed with the result.

"I never saw the legal advice that said we weren't going to win it, we were just told that legal advice," he said.

Cr Duffy was not satisfied with the restrictions on the homes.

"Who is going to police that?" he said.

"It's not so much the people that come, it's the visitors."

A second application for homes in Emerald Street in north Orange, is yet to have a date set with the Western Joint Regional Planning Panel.