More than 11,000 home builders and renovators have applied for federal government grants but fewer than 800 have received the money.

Assistant Treasurer Michael Sukkar is unfazed by the massive backlog in the $688 million housing stimulus scheme.

Mr Sukkar said the $25,000 cheques to help build a new home, substantially renovate an existing house or buy an off-the-plan property were not paid out up front.

“We don’t give people the grant on day one when they make the application,” he told Sky News on Thursday.

“You get the money when you start the project.”

Mr Sukkar said the pandemic-inspired program was already bearing fruit, with the latest housing data showing a significant increase in new home sales since the scheme was introduced.

He expects almost all of the applications lodged so far to be approved.

“If you don’t ever start the project you’ll be rejected,” the minister said.

“You’ve got to actually start the house, you’ve got to lay the slab. In most states you’ve pretty well got to start earth works, and at that point you get the payment.”

Treasury forecasts 27,000 people to apply for the scheme by the time it expires in December.

Mr Sukkar said there was no doubt the number of applications would exceed expectations and is not ruling out extending the scheme.