Construction Loan Lender in Overland Park
Ben Yeates at Fairway Mortgage finances new home builds from the ground up across the Kansas City metro from lot purchase through final close, with clear guidance at every draw phase.
Construction Loans Release Funds in Stages, Not All at Once
A construction loan works differently from a standard purchase mortgage. Instead of receiving the full loan amount at closing, funds are released in scheduled draws, payments made directly to the builder as specific building milestones are completed, such as foundation pour, framing, rough mechanical work, and final inspection. A "draw" is simply a disbursement tied to verified progress.
During the construction phase, borrowers typically pay interest only on the funds drawn to date, not on the full loan amount, which keeps monthly obligations lower while the home is being built. Once construction is complete, the loan either converts to a permanent mortgage or the borrower closes a separate purchase loan.
Draw Inspections Protect Every Party
An independent inspector verifies each completed milestone before a draw is released. This protects the borrower, the builder, and the lender; funds only move when the work is genuinely done.
Interest Accrues Only on Drawn Funds
You pay interest on what has been disbursed, not the total loan amount. As draws increase through the build, your interest-only payment rises incrementally rather than hitting you all at once from day one.
Draw Schedules Are Set Before Closing
The full draw timeline is agreed upon before you close, so both you and your builder know exactly when funds will be available at each phase. No guesswork mid-build.
What You Need to Qualify for a Construction Loan in Kansas City
Construction loans carry more lender scrutiny than standard purchase loans because the collateral, the finished home, doesn't exist yet. Ben Yeates at Fairway Mortgage walks you through every requirement upfront, so there are no surprises when you're ready to break ground.
- Down payment: Most construction loans require 10-20% down, depending on the loan program and your credit profile. Some programs allow less for qualified borrowers.
- Credit score: A minimum score of 680 is typical, though stronger scores unlock better rate options. We review your full profile, not just the number.
- Builder approval: Your chosen builder must be licensed, insured, and approved by the lender before funds are committed. We'll walk you through what that process looks like.
- Detailed construction contract: Lenders require a signed contract with your builder that outlines the full scope of work, timeline, and cost breakdown.
- Appraisal based on plans: Because the home doesn't exist yet, the appraisal is based on the architectural plans and specifications called an "as-completed" appraisal.
- Reserves:
You'll typically need to show cash reserves of two to six months of projected mortgage payments, depending on the loan program.
Every borrower's situation is different. A free consultation with Ben Yeates gives you a clear picture of where you stand before you commit to a builder or a lot.
The Construction-to-Permanent Loan Closes Once, Not Twice
A construction-to-permanent loan, or a one-time-close loan, combines construction financing and your long-term mortgage into a single loan. You lock your rate upfront, make interest-only payments during construction, and the loan automatically converts to a traditional mortgage when the home is complete.
Unlike a two-close loan, which requires separate construction and mortgage loans, a one-time-close loan avoids a second closing, extra costs, and the risk of higher rates before your build is finished.
Planning a New Build in Kansas City? Let's Talk.
A construction loan is one of the more complex financing products available, and the details matter. Ben Yeates at Fairway Mortgage has guided Kansas City area borrowers through the full build process from lot acquisition to final close and can do the same for you.
A free consultation costs nothing and gives you a clear picture of your options before you commit to a lot or a builder. There's no pressure and no obligation.