McAllan, who is due to meet with campaigners later this month, said the Scottish government was “not in position” to create a national Raac remediation fund.
However, she added it would consider individual requests from local authorities.
The housing secretary said the Scottish government was unable to direct Aberdeen City Council – which is run by an SNP and Liberal Democrat coalition – on exactly how to spend the money.
She said: “The decision will be for Aberdeen City Council and I would encourage them to work very closely with residents affected by this for the benefit of people in the area.
“I don’t see that there is a middle ground, but it is for the council to decide.
“What we have done is made £10m more available from an existing affordable homes project to allow the council to free up £10m, that they otherwise would have spent on that, to address Raac.
“But the money has been made available and it is up to the council on how best to use that in that area.”
