The federal and Northern Territory governments are working in partnership to close the gap in housing for First Nations communities across the NT.

Federal Minister Linda Burney and Assistant Minister Malarndirri McCarthy visited newly completed housing at Maningrida in West Arnhem Land this week, where 11 new homes have recently been completed.

The federal government said the new homes are part of "a pipeline of works" rolling out across dozens of remote communities throughout the NT.

The visit follows the announcement last month of a $4 billion federal investment in remote housing in the Territory that aims to build 270 homes each year over the next ten years.

Overcrowding and the condition of housing in the Territory, particularly in remote communities, have been ongoing problems - exacerbated by long wait-lists for social housing.

Minister Burney and Assistant Minister McCarthy also visited works on the Maningrida Water Supply Upgrade.

"Building better housing in remote communities is vitally important to closing the gap," Ms Burney said.

"An important focus here in Maningrida is to upgrade the water supply so that additional homes can be built.

"Minister Plibersek's commitment of $150 million to First Nations water will make a real difference in communities like Maningrida."

Because of old infrastructure and long-term under-investment, Maningrida currently loses around 70 per cent of the water it collects before it reaches a tap or a home. This equates to 21 litres per second, every day lost through leaks.

This means that clean and reliable drinking water isn't available all year round, and new housing cannot be built to address overcrowding.

The Maningrida project will mean a new two million litre tank for the local community, replacing the existing leaky mains and water network that connect the supply to the homes. The project will also include a new main to a new housing subdivision making new housing possible.

In December, the High Court ruled that people living in remote housing in the Territory can be compensated for distress and disappointment suffered due to dilapidated accommodation.

Senator McCarthy said it is great to see significant progress in Maningrida with "new homes for families and work well underway to improve water quality".

"Housing and better access to good quality water is essential to improving the lives of Aboriginal Territorians and closing the gap," she said.