The potentially swampy nature of the land might make stormwater requirements too difficult for housing, Millin said. Flexibility would be needed.
The marae was an anchor for the upper Aramoho community, Millin said.
Hipango wants the development to suit the people around it.
"We aren't a commercial property developer that comes and does things and then leaves. We live in this community."
A group including Whanganui District Council, Te Puni Kokiri and the Ministry of Housing and Urban Development met last year and walked the land.
An application to Kāinga Ora's Infrastructure Acceleration Fund is under way. More government money will be needed, but not all at once because the development can be done in stages.
The incorporation could sell the houses or sections outright - but keeping the land is a priority for Hipango and Te Riaki. They could also lease the land to the occupiers - provided banks will lend money for mortgages on building there.
"We have to make it work for the banks, because if we can't get finance we can't deliver," Millin said.
Houses could have one to four bedrooms, and they could be individually owned, rented or bought progressively through a shared equity arrangement. They would be open to anyone.
"We wanted this to be available, not just for whānau, but for the community," Hipango said.
The incorporation would need to make some kind of return, because it owns the land and would be taking the risk. It could decide to use its advantage to make the homes more affordable, or it could take a return and use that to support the marae.
"It's not about maximising profits but it does create an economic return back to here," Hipango said.
Roading links will be important. The development could link with another Aramoho subdivision the Alabaster family is planning; it would be reached from Cedar Drive.
It could also link with the former Jubilee Hospital site, now landbanked for Treaty of Waitangi claim settlement. Hipango has been talking to Whanganui Land Settlement Negotiation Trust chairman Ken Mair about that.
He didn't want a "rack 'em, stack 'em, pack em" style of housing.
"We want an eco-friendly design, following permaculture principles.
"There need to be green spaces built into this, food forests, connection as opposed to a grid-like pattern," he said.