Kansas may be better known as the home of Dorothy from the Wizard of Oz, but there are also nearly three million people that live in the Sunflower State. The state’s population grew by a steady 3% over the past decade and the population growth continues to put pressure on the housing supply in the state. The average sales price of a home this year was $260,366, according to the Kansas Association of Realtors.
Because of these rising prices and increased demand for real estate in Kansas, many borrowers are turning to construction loans to finance the construction of a new home. Some consumers prefer to spend money on constructing a new home rather than settling for something less for the same price.
Just like a home buyer considers various home loan options, a home builder should compare construction loans when building a new home to make sure the construction loan type they select is optimal for their situation.
Because finding the right construction loan in Kansas can be confusing, there are professional loan officers that focus solely on construction loans. These loan officers have years of qualified experience working together with underwriters throughout all stages of a construction loan, from the application to pre-approval, closing and building.
Reasons to consider a construction loan in Kansas
New construction loans finance the cost of constructing a new home from concept to move-in. The best new construction loans in Kansas provide the overhead cost of purchasing land, the cost of blueprints, building and permit fees, and also the labor and construction costs that will be needed to build the home of your dreams.
However, because these loans cannot be secured by a brick-and-mortar building, the process of getting approved by a lender can be more difficult than a traditional home loan. Lenders want applicants to provide more information before the final approval like the timeline, plan, and budget. Not to mention the usual review of your current finances before receiving approval.
One unique feature of home construction loans is that the funds are delivered throughout the building process in a series of installments as each phase of construction is completed. During this time you will need to pay only the interest on the funds drawn until construction is complete. At the end of construction, your lender will convert your construction loan to a normal mortgage loan.
4 Best Kansas construction loan lenders
If you’re ready to check out the top construction lenders in Kansas, here are the best options we’ve found through our research.
1. Capitol Federal
Capitol Federal is a medium-sized bank in Kansas and Missouri with more than $9 billion in assets. The bank offers construction financing as part of their lending products.
We contacted Capitol Federal to learn more about construction loans particularly and here is what we learned:
- Jumbo construction loans OK
- One-time closing, covering both the construction and end loan financing
- Interest rate is locked for life of the loan on fixed-rate loans
- Automatic conversion to a permanent loan with no change to your interest rate
- During construction, only interest is billed monthly
- Lower monthly payments than regular home improvement loans
- The loan always remains at Capitol Federal®, providing you excellent local service
If you’re interested in connecting directly with a loan officer at Capitol Federal that specializes in construction loans, we can put you in touch with them directly.
2. NBKC Bank
NBKC Bank is a Kansas City-based bank with a regional presence and experience working with customers in personal, business and, of course, construction projects.
We reached out to NBKC Bank to learn a little more about their construction loan and here is what they said. Honestly, we wish they provided more transparency about their product.
- Construction-to-Permanent Loan product
- Competitive rates
If you’re interested in connecting directly with a loan officer at NBKC Bank that specializes in construction loans, we can put you in touch with them directly.
3. Wintrust Mortgage
Wintrust Mortgage is one of the top 20 bank-owned retail mortgage originators in the country that originates in excess of $4 billion in loans annually in all 50 states.
Recently we asked Wintrust Mortgage to provide us with details on their construction loan and this is what they said:
- One-Time Closing. Only pay the closing cost once
- Lock in your rate upfront and avoid interest rate risk
- FHA, VA loans, and Conventional options
- 0% Down up to $822,375 (VA ONLY)
- 3.5% Down up to FHA County Limits ($356,362-822,375)
- 10% Down on Second homes
- FICO 680+
- Loans must include building no Lot/Land Loans
- Maximum of 10-acres per build site
- Stick Built and Modular Homes ONLY
- NO log homes or metal homes (barndominium)
- Tear Down and Rebuilds do qualify
- No self-build or owner builder construction loans. The builder must be approved.
- Does Not allow ADUs (Accessory Dwelling Unit – Granny Flat/Garage Conversions/Basement)
- Now lending in all 50 States
If you’re interested in connecting directly with a loan officer at Wintrust Mortgage that specializes in construction loans, we can put you in touch with them directly.
4. Bank of Flint Hills
Bank of Flint Hills is a regional Kansas bank with a long history of providing bank and lending services to the citizens of Kansas. They also offer a construction loan product for both owner-occupied and investment properties.
We reached out to Bank of Flint Hills to learn more about their construction loan and here is what they said:
- New owner-occupied homes
- Investment residential properties
- Land/Lot loans if you’re not ready to build
- Pay interest only as funds are drawn
- Adjustable and fixed-rate loans available
If you’re interested in connecting directly with a loan officer at Bank of Flint Hills that specializes in construction loans, we can put you in touch with them directly.
Does a Kansas construction loan make sense for you?
There are a few downsides and a lot of upsides when you get a construction loan in Kansas. You will likely only make payments on interest during the construction phase, which makes budgeting for the construction of your dream home while making your current house payments more manageable.
Those challenges you will face with a construction loan in Kansas are mainly the differences you’ll find between a typical mortgage loan process and a construction loan application process. In order to navigate these differences, you will want somebody that has professional experience applying for construction loans as a career.
If you’re looking to explore construction loan programs in other states, check out our national guide to construction loans and get started exploring all 50 states.
Joshua Holt is a licensed mortgage loan originator (NMLS #2306824) and founder of Biglaw Investor. His mortgage expertise lies in the areas of professional mortgage loans, particularly for lawyers, doctors and other high-income professionals. Prior to Biglaw Investor, Josh practiced private equity mergers & acquisition law for one of the largest law firms in the country.