The Minister Responsible for Housing New Zealand, Bill English, says the sale of state houses to tenants and first-home buyers is going under two existing schemes.
About 200 have been sold in the tenant home ownership scheme since 2009.
And nearly 200 have been sole in FirstHome ownership scheme for first-home buyers since 2013.
Mr English was responding to calls from Labour housing spokesman Phil Twyford to say whether the Government was exploring a "mass sell-off" of state houses to tenants.
Mr Twyford said Mr English was desperate to offload state-housing and the Salvation Army and Methodist Mission did not want to buy up state houses.
Referring to a column in today's Herald by Sir Bob Jones, he said it seemed Mr English was thinking about a mass sell-off to tenants.
• Bob Jones: Enrich poor with home ownership
• John Armstrong: If the Salvation Army can't do it, no one can
• State housing: Government put pressure on us - Salvation Army
• Salvation Army rejects buying state homes: 'Housing NZ is making a mess'
In the column, Sir Bob wrote about the merits of selling state houses to tenants, and said that when he mentioned it to Mr English at a social function, Mr English had told him the Government was exploring something along the same lines.
Mr English told the Herald today: "Neither Bob in the conversation nor Phil Twyford are aware that that process is well underway."
There were two different tenant sales schemes; one had had a small number of sales and the other involved the Government subsidizing their deposit.
As well as nearly 200 sales, there were another 300 or 400 in the pipeline.
"From the Government's point of view, it can be a lower cost option for some of these tenants - a pretty small minority - for them to be able to buy the house instead of us renting it to them with a subsidy."
FirstHome (about 180 sold since launched in Oct 2013)
FirstHome is a home ownership initiative which helps eligible buyers to afford to buy selected properties Housing New Zealand is selling across the country.
To help with the deposit, eligible buyers receive a grant of 10 per cent of the purchase price of the property, capped at $20,000.
Buyers may also be eligible for other first home ownership assistance, such as the Welcome Home Loan, and the KiwiSaver Home start grant and/or the KiwiSaver first-home withdrawal. These can be combined with the FirstHome grant to help people buy a FirstHome property.
These homes are exclusively available for first home buyers for three months. If the house is not sold then it will be placed on the open market. FirstHome properties are mainly located in provincial areas.
Tenant Home Ownership Scheme (about 30 houses per year since 2009)
• The Tenant Home Ownership programme is a government initiative that was launched in September 2009 to offer state house tenants the opportunity to buy the home they live in. It encourages tenants into home ownership. It also helps Housing New Zealand buy or lease more houses in high demand areas.
• All state house tenants are eligible to apply to Housing New Zealand to purchase their homes. However, not all state houses are potentially for sale to tenants. If the tenant's home is not available for sale, they may be offered an alternative vacant state house in their area.
Source: Deputy Prime Minister's office