AIB says it will begin to accept new mortgage applications from customers who are in receipt of the State's Covid-19 payment supports from next week.
However it says a final assessment on a customers' ability to meet repayments would still be made before any loan is drawn-down.
Earlier this week The Irish Times reported that AIB had paused mortgage applications from customers on the Temporary Wage Subsidy Scheme or the Payment Unemploment Payment.
It said the pause should continue until these customers were no longer in receipt of Covid payments.
In a memo to lending managers the bank also encouraged extra scrutiny for people working in sectors that had a greater risk of being impacted by Covid-19 in the long-term.
In a statement today AIB said it would resume applications from people on Covid-19 payments.
"As the Irish economy re-opens and increasing numbers return to work, AIB will from next week commence accepting new mortgage applications from customers who are on the State's Covid-19 supports.
"However, in line with normal procedures, the final assessment of the customer’s ability to meet repayments is always made shortly before drawdown."
The bank also said it was obliged to ensure that "all loans are sustainable and affordable" in order to "protect the customer, the bank and the wider economy against the risk of future financial difficulty".
AIB also said it would provide mortgages to customers on a Covid-19 payment who already held a Letter of Offer from the bank. Though it also said that such customers are always dealt with on a case-by-case basis and encouraged those with such a letter to make contact.
Meanwhile it said it would continue to process customers who had an Application in Principle "as quickly as possible".