The lender is providing a £50m fund to help smaller housing developers build homes across Wales.
It is also adding a further £25m to the £50m it has already provided smaller housing associations in Wales for their own building works.
Principality Building Society commercial relationship team head Jim Brook said the mutual had been monitoring the debate around possible barriers facing smaller house builders.
“One has been a lack of competitively priced funding, particularly in areas not well serviced by the wider banking community,” he said.
“We have been prominent in supporting Welsh SMEs for a number of years but have the capacity to do so much more.
“If collectively we are to deliver on ambitious housing targets, then small to medium developers have a key part – this initiative is aimed at giving heightened awareness of the role which Principality can play in helping them.”
Minister for housing and local government Julie James added: “Supporting SMEs to overcome barriers to building new homes is a key priority for the Welsh Government so we very much welcome lenders such as Principality making this commitment.”