The Tisbury zoning board of appeals has unanimously approved the Kuehn’s Way housing project, clearing the way for 20 affordable apartments to be built on State Road in Vineyard Haven. But funding for the $6.3 million project remains about $4.2 million short of the goal.

First planned as Bridge Commons, the project was approved in 2004, but was never built and later fell into foreclosure. The Island Housing Trust bought the property in a joint deal with the Martha’s Vineyard Land Bank last year, renaming the project after former housing trust board member Robert Kuehn, who died in 2006.

Current plans call for 10 modular duplexes with 20 rental units on 14.8 acres in the Red Coat Hill section off State Road. Island towns contributed a total of $500,000 in community preservation funds this year, and IHT plans to ask for another $800,000 in the coming year. Trust executive director Philippe Jordi said this week that pledges from private donors so far total about $500,000.

Last Thursday the Tisbury zoning board unanimously approved the proposal, along with a long list of conditions. Among other things, the project must include vegetative screening for abutters on State Road, and the installation of denitrifying septic systems. Two proposed wells must be sampled once a year for five years to monitor the nitrate levels.

Permits for the septic and public water systems are pending from the Tisbury board of health and state Department of Environmental Protection.

The project has been opposed by neighbors concerned about density and environmental impacts, including groundwater.

Zoning board members on Thursday discussed whether to require an area for school buses to pull off State Road, although Mr. Jordi said the issue was out of his hands since the road falls under state jurisdiction. He added that VTA manager Angela Grant has argued against the pull-off for safety reasons.

“We’re going to look into that and get back to them,” Mr. Jordi said, speaking to the Gazette this week.

The plans have changed considerably since 2004. In July the Martha’s Vineyard Commission decided to not require a new public hearing, allowing the project to bypass commission review. By contrast, the town zoning board treated the project as essentially a new proposal.

The Island Housing Trust is developing the project using a comprehensive permit under Chapter 40B of state law, which allows affordable housing projects to bypass some requirements. For Kuehn’s Way, that means a higher density and rate of development than the town would otherwise allow. The zoning board also waived local permitting fees and a minimum requirement for the number of parking spots.

Looking ahead, Mr. Jordi said the housing trust plans to reach out to Island towns, along with private donors and state grant programs, to raise another $4.2 million for the project (the current plan calls for raising about $1.8 million from each source). Permanent financing would cover the remaining $1.1 million.

Mr. Jordi said town contributions will help spur private donations, which in turn will help leverage funding from the state. “They want to see that the project is ready to go,” he said, adding that funds are scarce.

The rental apartments will be restricted to people earning between 50 and 80 per cent of the area median income, or between about $30,000 and $65,000 per year, depending on family size. Mr. Jordi said he hopes to extend the availability to lower-income households as well.

If funding can be secured, the housing trust hopes to break ground as early as next fall.