Ministers rejected a plan to let individuals and groups sponsor up to 200 refugees a year, papers released by Immigration New Zealand show.
The government eventually settled on a pilot scheme of 25 places, saying it would test communities' commitment to supporting refugees.
Read the documents here.
Cabinet decided in June to increase New Zealand's annual refugee quota to 1000.
The papers, released under the Official Information Act, show ministers were told that with extra funds, the Mangere Refugee Resettlement Centre could accommodate up to 1300 people a year.
The suggestion of large community sponsorship was outlined in recommendations for how the quota could be boosted.
The briefings and memos show the government was under pressure internationally to shoulder its share of the global refugee burden.
It anticipated criticism by refugee advocates of the decision not to increase the quota by more.
Reminding the public of the the government's full refugee and humanitarian programme, and emphasising the cost of an increase, "would mitigate public traction of this criticism", officials said.
The papers also showed how settlement areas outside Auckland and Christchurch are being used to alleviate pressure on those cities' social housing markets.
They also revealed that large families and people in polygamous marriages do not meet the refugee selection criteria for New Zealand.
About 10 percent of United Nations-identified refugees are not granted an interview and another eight to 10 percent are refused following an interview.