A controversial low-income housing project in Freeland may be moving forward after all.

Teri Anania, executive director of the Island County Housing Authority, confirmed last week that the major permitting problem facing the $6.3-million project is in the process of being resolved.

“It’s a huge relief,” Anania said.

“We have to keep the momentum going.”

Sunny Side Village is a four-building, 26-unit, low-income housing project planned for a nine-acre lot off Fish Road, between State Highway 525 and Scenic Avenue.

The housing authority has worked on the development since 2008, but those plans nearly fell through earlier this year.

Concerns about a nearby well, which supplies water to a large portion of Freeland, were validated when a hydrologist found that the housing complex’s planned septic system would not be enough to keep nitrate levels in the well from exceeding state standards.

Despite having sunk nearly $1 million into the project, the housing authority had no other choice but to begin looking at a pricey on-site treatment plant.

At the time, it was unclear whether the additional expense could be borne, putting the entire project in jeopardy.

Anania said those concerns are put to rest.

The new system is expected to cost about $300,000. About half of that was secured from a contingency fund and the rest was found within the existing budget, she said.

According to Keith Higman, director of Island County Public Health, the hydrologist’s determination put the housing authority “back to square one” in terms of septic permitting.

Unlike traditional septic systems, large on-site treatment plants treat effluent above the surface so it can be reused for things such as irrigation, watering landscaping or flushing toilets.

“You don’t just dispose of it back into the ground,” he said.

Permitting of such systems fall under the purview of the state Department of Health. He speculated that the state’s review could delay the development’s ground breaking, according to Higman.

Anania confirmed construction is expected to be pushed back about three months. The plan was to start in the summer but now the best guess is sometime this fall.

“I’m hoping all the stars align correctly for us,” Anania said.

The housing authority is not an entity of Island County government but a state special purpose district that aims to provide housing for elderly and low-income residents.

Units at Sunny View will add to the 110 public housing units the organization owns and manages on properties in Oak Harbor, Coupeville and Langley.