A stand-off of more than 24 hours ended in Levin on Friday night with the man at the centre of it being taken to hospital in a critical condition.
Witnesses saw a large flash in the man's Bledisloe St house, followed by smoke and flames.
The man had been threatening self-harm throughout. He is in Palmerston North Hospital with moderate injuries.
Police have not said why that meant 80 of his neighbours had to stay clear, but early Saturday morning they thanked the Defence Force's EOD (Explosive Ordnance Disposal), or bomb disposal, team for its assistance.
A spokesperson said police and other agencies had finished inspecting the house to ensure there was no ongoing risk, and residents who had left their homes were allowed to return last night.
"There will be an active police presence in Levin this weekend as we provide community reassurance and continue the investigation into the Bledisloe St incident."
They said residents could be reassured there was no need for concern.
"Police will be going door to door today to speak with residents and ensure they have any appropriate support.
"A scene guard will remain in place at the address as staff continue investigations throughout the weekend."
A neighbour said the house which involved in fire on Friday night is largely intact, and the neighbouring properties looked unscathed.
Those evacuated from their homes, or anyone who needs support as a result of this incident is urged to contact Victim Support on 0800 842 846.