Just four people have drawn down mortgages offered to them under a €500m government plan which is supposed to provide loans to first-time buyers refused by the banks.

Latest figures for the Home Choice scheme also reveal that the total cost of administering it stands at €290,000 – or roughly equivalent to the cost of one whole mortgage allowable under the scheme. This has prompted renewed calls from the opposition for the scheme to be scrapped entirely. Previously it was described as little more than a "PR stunt" on behalf of the government.

Critics of the scheme also say the level of bureaucracy involved, and its tough qualifying conditions, mean it is virtually unworkable.

More than a year and a half after its introduction in January 2009, housing minister Michael Finneran confirmed that, by last month, a total of nine applications under the scheme had been approved. Just four of these had been drawn down.

"Over 1,400 prospective purchasers formally registered interest on the dedicated Home Choice loan website and, to date, 85 applications have been made," he told the Dáil. "Of the nine approved applications, five were for secondhand properties and four for new-build properties. The four loans drawn down refer to new-build properties."

First-time buyers can apply for a Home Choice loan to purchase a new or secondhand property or to build their own home. It provides up to 92% of the market value of a property, capped at a maximum of €285,000.

Labour Party housing spokesman Ciaran Lynch said the fact that there had been just four loans drawn down since the scheme's inception was "proof positive that the scheme was flawed from the off". He noted the scheme only applied to people who had been turned down by two financial institutions.

"There are two reasons why a bank might refuse a mortgage: a fear that the prospective [borrower] could not pay back the loan or a fear that the property is over-valued," he said.

"What purpose would this scheme serve other than to provide something akin to a subprime lending service and set a false floor price for new houses in a declining, yet still over-valued, property market?"