Kalamazoo County State Bank (KCSB) is one of the most flexible construction lenders in Michigan. By allowing you to work with your builder, doing some of the work yourself, or self-contracting the entire project, you can save thousands of dollars on the total cost. KCSB will work with you, your builder, contractors, and subcontractors to make this an enjoyable process and get you into your dream home.
How to get started.
- Complete our mortgage application.
- Provide us with all financial information and other documentation requested.
- Provide proof of ownership of land or contract to purchase.
- Supply a contract to build, construction budget, draw request, cost breakdown for each specification, and blueprints of the home to be built.
- Include documentation that the proposed home meets all municipal, zoning and subdivision requirements.
The right builder, suppliers, contractors, and subcontractors.
KCSB cannot warrant the work of any of the trades people you will be contracting with, but we want to know who they are before we grant a construction loan. You will receive a form from us requesting information on your builder, supplier, contractors, and subcontractors. This will need to be completed and returned to us prior to approval.
How funds are disbursed throughout the construction process.
At closing, we can advance money to pay for the land (with your down payment) or any balance owed, and the closing cost. Your own funds will be used to start the construction process. The first draw usually will not take place until the foundation is in place and a mortgage survey has been completed to confirm the correct placement of your home. Our policy is to disburse funds for work that has been inspected as being complete.
Payments during the construction period.
Your monthly payments are based on an interest only term calculated at the rate specified in your mortgage note. The interest is billed to you monthly and is calculated on the daily outstanding balance of your loan. This amount must be paid monthly, and no additional draws will be allowed until payments have been made.
What happens if a change in plans increases the cost?
As the holder of your loan, KCSB must approve any changes made to your original plans. If a change will result in an increased budget, or if your request for a disbursement exceeds the available amount, it is up to you to make up the difference with KCSB.
We will need proof of insurance.
KCSB will need to see proof of Builder’s Risk Insurance from your builder. If the home is being constructed in a flood hazard area, you must provide proof of Federal Flood Insurance. You will also need to have your own individual Homeowners Insurance with a construction clause and listing KCSB as loss payee.
For more information on how you can finance a home construction loan with self-contracting, call your home construction lending experts at KCSB. KCSB is one of the few lenders who offer the ability to self-contract and allow for partial work with their construction loan.
To learn more about KCSB’s Construction Loan Program, call 269.679.5291 or visit one of our branch offices. See https://kcsbank.com/locations to find a location most convenient for you. Discover the most flexible construction lenders in Michigan, today!
Kalamazoo County State Bank is an Equal Housing Lender.
