Bank of Ireland is increasing its funding for housing development by 40% with the aim of supporting the construction of 25,000 homes.
The bank said it was increasing the pool of capital to €2.5 billion from €1.75 billion currently.
"The greatest challenge facing Irish society today is housing," said Gavin Kelly, CEO, Bank of Ireland Corporate & Commercial Banking.
"The simple fact is that we need more. Our ambition is to play an even bigger role in meeting this challenge by investing more of our capital to drive more supply."
Within the new higher figure, funding for social and affordable will more than double from €400m to €1 billion.
"While there's a serious mismatch between supply and demand, we also need greater diversity in housing to support the evolving needs of our population," Mr Kelly said.
"That’s why we are also aiming to more than double our finance for social and affordable homes, because we believe that everyone should have access to high quality housing."
Currently, Bank of Ireland is funding the development of around 21,000 residential units across 170 sites.
3,200 of these are social housing properties.
Recent projects include 250 apartments in Palmerstown in Dublin which were finished last year, while 197 houses and apartments are due to be completed at Glenamuck Road in Kilternan this year.
