Kāinga Ora says flood-damaged state houses in Auckland will not be eligible for a buyout.
The floods affected more than 2000 state homes, with 120 initially deemed unrepairable.
Kāinga Ora acting deputy chief executive for Auckland and Northland, Paul Commons, said Auckland Council haD informed the state housing agency it will not be including Crown-owned land in its buyout scheme.
He said initial conversations with council indicated fewer than 50 Kāinga Ora properties would be eligible.
Some of those sites include multiple homes.
"We are continuing our assessment of those properties to determine whether steps can be taken to allow them to continue to be used for public housing."
This week Auckland Council started to inform owners of the worst-affected flood damaged homes that they are eligible for a buyout.
The city's recovery office deputy manager, Mace Ward, said 25 homeowners in Muriwai had been advised they fall into category 3.
He said the office aimed to advise between 20 to 50 homeowners of their buyout category each week.
"We will be focusing on those areas that have the highest impact where people aren't able to live in their homes," Ward said.
"We are also making the best attempts we can to focus on individual communities, where people are displaced from their home, they're displaced from their communities. They are high priority."
The buyout offers will be based on a market appraisal for 26 January - the day before the Auckland Anniversary weekend flooding.
A handbook given to homeowners in line for a buyout stated the buyout process is expected to take between three to six months.
It stated the buyout amount would be less any insurance and EQC claim, and less the 5 percent homeowner contribution.
"Auckland Council is not able to deal with your insurance claim or your insurer on your behalf as it is a contract between you and your insurance company," it states.
"You will be responsible for settling your insurance claims before Auckland Council settles your buy-out."
The handbook also states that any insurance claims collected after the buyout is signed off will go to Auckland Council to offset costs associated with the buyouts.
Category three property owners would also receive $5000 funding towards professional fees, such as legal advice or an alternative valuation.
A dispute process is also outlined in the handbook, in which category 3 homeowners will have three months to apply for a review and those wishing to dispute their home's valuation will have one month to apply for a review.
It outlines how homeowners in category three for buyouts would be invited to a meeting with a property advisor, ahead of any valuation.