Three Valleys Housing has selected East Midlands Housing Group as its preferred partner.
A final decision will be taken by the Three Valleys Housing board after the consultation ends on November 11.
Chair of Three Valleys Housing Bob Hingston said: "We have had a very productive series of discussions with a number of housing associations which expressed an interest in becoming our partner. We are now pleased to announce that our preferred partner is East Midlands Housing Group.
"We have already involved residents, staff and board members closely in the process to get to this stage and everyone has been extremely impressed by the quality of East Midlands’ homes and services and by what the group could offer. Subject to final negotiations and further consultation with residents we hope that we will be able to agree a future partnership with East Midlands Housing Group."
Three Valleys Housing decided in February to find a partner to join forces with in order to secure a stable future for the organisation.
Joining a new housing group will help Three Valleys Housing to save money by sharing services and will give the organisation greater strength and security, as well as the chance of developing new affordable homes.
Chan Kataria, EMH Group Chief Executive, commented: "Our dealings with Three Valleys Housing have confirmed a strong strategic fit between the two organisations, with mutual benefits for customers and staff arising from the proposed partnership. We look forward to welcoming them into our group."
The announcement follows support from the Tenant Services Authority (TSA) for the work Three Valleys Housing has done since it was placed into supervision in February.
In a letter this month, the TSA commented that since the organisation was placed in supervision in February it had successfully worked to stabilise its governance, management and finances and had carried out a clear and accountable process for finding a partner organisation.
Bob Hingston added: "It has been a difficult year for Three Valleys Housing but the TSA’s positive comments are a very welcome endorsement to the approach we have taken and to the professionalism of our staff.
"We are delighted that the TSA has recognised the work of staff and residents in selecting a partner. The consultation with residents has allowed us to take a massive step forward towards empowering residents and we will be continuing this as we build a successful partnership for the future."