“At the end of the day, I don’t think we have a sustainable basis for denial,’’ said Jeffrey Scornavacca, the zoning board’s acting chairman. “It’s very, very likely we would fashion some sort of approval with conditions.’’

The board has scheduled a July 1 hearing for Lakeview Estates, a development of 100 single-family homes proposed by Fafard Real Estate of Milford under the state’s Chapter 40B law, which developers can use in communities like Bellingham where less than 10 percent of the housing is deemed affordable.

Fafard’s project, near Silver Lake Road and Geordan Avenue, would have roughly 25 percent of the three-bedroom units set aside as affordable housing, to be sold at a discount to income-eligible families. Under Chapter 40B, in exchange for including affordable housing, developers can bypass most local zoning restrictions, and ask the state’s Housing Appeals Committee to overturn a denial or conditions attached by the town.

The project was first proposed in 2004 with 250 homes, and has been whittled down through several rounds of applications and rejections.

Its latest version, even with less than half its original number of units, prompted a recent protest against both the development and Chapter 40B. The June 1 rally in Potter Circle, not far from the project site, drew roughly 50 people.

Fafard did not return a call seeking a comment on its project and the controversy.

The history behind the proposed development is a winding one.

In 2007, after the state Department of Housing and Community Development notified Bellingham that it had met the 10 percent affordable-housing threshold, and the zoning board voted to deny the Lakeview Estates application, which at the time called for 120 units. Fafard protested to the Housing Appeals Committee, and a subsequent review concluded that the state agency had been incorrect in finding the town had reached the affordability target.

Last August, in the midst of the review, Fafard refiled its application for 250 homes with Bellingham’s zoning board. The town filed a motion to block the change, citing the negotiations over the 120-unit plan; in November, the Housing Appeals Committee backed the town, and the ensuing settlement discussions led to the current 100-home proposal.

Bellingham is about 40 units short of the 10 percent threshold that would exempt it from Chapter 40B, according to Town Administrator Denis Fraine. However, he said, the revised population and housing figures that will be included in this year’s census will probably push the figure up by another 50 to 60 units. The pending Lakeview Estates development would add 25 to Bellingham’s inventory.

Housing is considered affordable if it is within the financial reach of a family of four making 80 percent of the town’s mean income, which in Bellingham’s case is $68,300.

Because the town is below the threshold, local officials are limited in what they can do to stop Lakeview Estates.

“The zoning board has done a good job of trying to reduce the number of units,’’ said Fraine. “We’re trying to take control so the state housing appeals court doesn’t just make the decision and give it to us without any input from the town.’’

Even with the concessions by the developer, Lakeview Estates would still be far denser than town bylaws would otherwise permit. The land is zoned for agricultural uses, board chairman Scornavacca said, which would normally allow a maximum of 35 houses on the site’s 70 acres of buildable land.

“They’re looking to do 100 — so, essentially, it’s nearly three times the density,’’ Scornavacca said.

“Unfortunately, under 40B, we’re at a point where we’re under our 10 percent and are obviously vulnerable,’’ Fraine said.

The recent rally at Potter Circle was organized by Ryan Fattman, a selectman in Sutton and Republican candidate for state representative in the 18th Worcester District, which covers Bellingham, Blackstone and Millville, and parts of Sutton and Uxbridge. Fattman has been working with a citizens group campaigning to get a referendum question on November’s ballot to repeal the housing law.

Fattman said the Lakeview Estates project is “emblematic’’ of what’s wrong with Chapter 40B, as cities and towns lose a certain amount of control over local developments.

“Communities are held hostage,’’ Fattman said. “It’s an extra burden that puts more people into the community and more stress on the roads and public safety.’’

Philip Hailer, a spokesman for the state Department of Housing and Community Development, which oversees Chapter 40B, said that more than 56,000 housing units have been built under the law since it was enacted in 1969, and roughly 29,000 of those have been affordable.

“Without the law in effect, those probably wouldn’t have been built,’’ Hailer said, adding that his agency considers Chapter 40B “a very valuable housing development tool.’’

Hailer said he expects the Coalition to Repeal 40B to succeed in getting the question on the ballot, but he has confidence in what the voters will decide.

In Bellingham, Joyce Notine, who lives on Chamberlain Road near the proposed development and attended the rally, said she is concerned with how the town would pay for the additional students that the development would bring to town, and sees traffic as another sticking point.

“Three-fourths of the roads will funnel traffic into one tiny . . . area’’ at Potter Circle, Notine said. “This is an area filled with children, and there are no sidewalks at this time. It makes no sense at all.’’

Scornavacca said the mitigations being discussed with Fafard include the creation of sidewalks and roadway improvements, and that the project’s likely effect on traffic is still being reviewed.

But opponents remain wary of what the development would bring.

“I know the zoning board is feeling incredibly pressured to sign off on the 100-unit proposal,’’ Notine said. “Hopefully, 40B will be on the ballot and be overthrown, but we don’t know if we can hang on that long. The zoning board might pass it, and then we’re up a creek.’’