Cork County Council officials had made the project in Bantry a priority some years ago, in association with the voluntary housing body Cluid.
However, in April 2015 the department refused to fund the conversion of the former Sisters of Mercy-owned convent church, living quarters, and outbuildings.
Council officials confirmed at a meeting of the Western Division in Clonakilty yesterday that the department has since funded a feasibility study into the project, which Cluid is now completing.
They released the news after Cllr Mary Hegarty (FG) asked what, if any, progress was being made as many local people were inquiring about the future of the site.
Officials described the project as “complex” and said renovating the premises would “involve a lot of money”. They said the council would be meeting in the next couple of weeks with Cluid officials to discuss the outcome of the feasibility project and, after that, they would meet with officials from the Department of the Environment to see what progress might be made.
Ms Hegarty said she was hoping that the properties could be transformed to help ease the housing crisis. She said she knew elderly couples in large, private rented accommodation who would love to live there and if they moved into the former convent it would free up properties for families who are crying out for proper accommodation.
Meanwhile, Cllr Kevin Murphy (FG) said he was concerned about the lack of progress in building houses on a large landbank which Cluid owns in Kinsale.