The government has so far issued £120m of loans for projects using offsite construction techniques from its £3bn Home Building Fund.
The figure represents just 4% of the total value of the £3bn fund, to which a further £1.5bn was added in the 2017 autumn Budget specifically targeted at supporting small- and medium-sized builders who cannot access the financial support they need.
The news emerged as part of the government's response to the House of Lords Science and Technology Select Committee report into offsite manufacturing.
The report called for a "radical overhaul" of construction and warned that the sector would struggle to meet the UK's need for housing and infrastructure if it did not change.
In response to calls from the Committee to put pressure, through Homes England, on housing associations and local authorities to use offsite manufacture, the government said it had "taken steps" to address the barriers to the expansion of offsite.
It claimed that the Affordable Homes Programme (AHP) set out the benefits of building offsite construction techniques and encouraged bidders to use innovative ways of building. It added that the £450m Local Authority Accelerated Construction Programme would focus on using modern methods of construction and increase the number of participants in the housebuilding sector.
The government also highlighted that it is working with the Construction Leadership Council to increase demand for buildings using offsite construction techniques and to develop standards for those products and associated manufacturing technologies.
"Homes England will be working with key development partners on a range of pilot projects, to demonstrate different off-site technologies on a number of sites. The purpose of these pilots is to provide a test bed for research and data collection to support both the objectives of our working group on quality assurance, insurance and finance and the wider industry," it added.
The Committee's report recommended that the government ensures that companies who want to bid for government contracts need to comply with the BIM mandate and that it is important for the government to enforce the mandate because it is a "significant enabler for offsite manufacture".
In response, the government said: "The Government currently requires all projects to be delivered according to the BIM Level 2 standard. As set out in the Government Construction Strategy 2016-2020, all central government departments use this method.
"The Government continues to collaborate with industry through a number of channels, to drive the continued uptake of BIM within the construction supply chain. The information required for companies to comply with the BIM mandate is provided by the Centre for Digital Built Britain (CDBB)... The Government will continue to work with institutions and industry representative bodies to increase the adoption of BIM technologies among their members and engage with different parts of the supply chain, helping them understand our needs as a client and provide them with the opportunity to feedback and share experiences and lessons learned on the challenges they face in regard to BIM Level 2 implementation."
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