Loan approvals by State-owned lender Home Building Finance Ireland hit €3.3 billion by the end of last year.
That represents a near €660m increase - or 25% - on the level of approvals by the end of 2024.
HBFI was established in 2019 to provide homebuilders with a fresh source of finance.
Since then it has approved funding for nearly 16,600 new homes across 25 counties.
By the end of last year, 6,812 of those had been sold, with 4,099 contracted for sale or sale agreed.
"We're seeing strong demand for funding across all our products," said Dara Deering, CEO of HBFI.
"Particularly across SME house builders - over 80% of our funding is for schemes for less than €20m," she noted.
Ms Deering also said they were seeing a good spread in terms of the type of homes being funded.
"The bulk of those homes are for owner occupiers, we're also supporting people who need rental accommodation and those in need of social housing," she said. "And we're really regionally spread, we're seeing strong demand in 25 out of 26 counties and the majority of that funding outside the Dublin area."
Despite the growth in loan approvals, the pace of increase is down on 2024, when approvals rose by more than €1 billion or 61%.
Ms Deering said this was due to a number of unique factors in 2024, as builders sought to accelerate their plans.
However she said HBFI had adequate funding with no cap on the amount it could lend.
That is in part due to the additional €200m in funding it secured through a deal with Danske Bank last year.
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Ms Deering also said she expected to see the amount of funding it provided for apartment building would increase in the future, following changes by Government designed to address viability issues.
To date, just one third of the homes HBFI has funded were apartments.
When HBFI was established in 2019 it was designed to fill a gap in the development funding market, created in part by the cautious stance taken by traditional Irish and international lenders.
Ms Deering said the market had changed considerably since then, but gaps still remained - and it was key that her company was able to react quickly to the needs of builders.
"We all need supply to increase and that means the quantum of funding required will also increase," she said.
"So our role is to make sure that we continue to stay agile and as emerging gaps are seen in the years ahead that we will respond to that because we want to make sure that finance is not a barrier to new supply," she added.
