Today we’ll check out another home builder’s in-house mortgage lender, this time KB Home’s “KBHS Home Loans.”
As the name suggests, they are the affiliated lender for home builder KB Home, a SoCal-based company that has been around since the 1950s.
KB Home has a big home building presence in its home state, along with nearby Arizona and Nevada, Texas, and Florida.
To facilitate the sale of their homes, they lean on KBHS Home Loans to streamline the financing process.
What’s perhaps more interesting is that they are backed by another lender, Guaranteed Rate, which is a top-10 lender nationally.
KBHS Home Loans Fast Facts
- In-house mortgage lender for parent company KB Homes
- Founded in 1957, headquartered in Los Angeles, CA
- Parent company is publicly traded (NYSE: KBH)
- Licensed to lend in 10 states nationwide
- Funded nearly $3.5 billion in home loans last year
- Most active in California, Florida, and Texas
- Also have an affiliated insurance agency and title company
KBHS Home Loans is the in-house mortgage lender for parent company KB Homes.
They primarily offer home purchase loans to the buyers of their newly-built homes located throughout the country.
The Southern California based home builder has been around since 1957, having previously been named after founders Eli Broad and Donald Kaufman as the “Kaufman and Broad Building Company.”
One of their claims to fame is the creation of the “Townehouse” design, intended to woo consumers who would typically rent instead of buy a home.
The company later changed its name to KB Home in 2001 and today refers to itself as the “#1 customer-ranked national homebuilder.”
That’s based on TrustBuilder ratings and reviews that are powered by NewHomeSource, a site that apparently lists honest reviews from real homeowners.
Anyway, KB Home established its own mortgage company back in 1965, and that eventually morphed into what is now KBHS Home Loans.
Interestingly, KBHS Home Loans was formed in 2016 as a joint venture between KB Home and Stearns Lending.
Stearns Lending was acquired by Guaranteed Rate in early 2021.
This explains the disclaimer on their website that says all loan programs subject to Guaranteed Rate, Inc. underwriting guidelines.
They are licensed in 10 states nationwide, including Arizona, California, Colorado, Florida, Idaho, North Carolina, Nevada, South Carolina, Texas, and Washington.
Last year, the company funded a solid $3.5 billion in home loans, with a good chunk of it coming from their home state of California.
They were also quite active in Arizona, Colorado, Florida, Nevada, and Texas, where they have home building operations.
KBHS Home Loans prides itself on being a fully-integrated, dedicated mortgage lender for KB Home, with daily collaboration to ensure things keep moving along on schedule.
Like other home builders, they also have an affiliated insurance company, KB Home Insurance Agency, and title insurance business, KB Home Title Services.
How to Apply with KBHS Home Loans
To get started, you can either visit a new home community or surf on over to the KBHS Home Loans website.
If you do the latter, they have an online loan officer directory and a contact form if you prefer for someone to reach out directly.
There is also a learning center with a mortgage glossary, free mortgage calculator, informative videos and articles, and a FAQ section.
When you’re ready to apply, you can do so electronically via their digital loan application from a computer, tablet, or smartphone.
It allows you to complete the process mostly paperlessly, with the ability to link financial accounts (bank, employer, etc.) and securely upload documentation.
Once your loan is submitted, you’ll be able to log in to the borrower portal 24/7 to check loan status, satisfy outstanding conditions, or get in touch with your lending team.
KBHS Home Loans loan officers also have the ability to screen share in real-time if you need extra help you complete any step of the mortgage process.
When it comes time to fund, their so-called FlashClose process allows borrowers to sign most of their closing documents electronically.
This means you can digitally review and share documents in advance with your attorney or settlement agent and spend less time at the closing table.
Loan Programs Offered by KBHS
- Home purchase loans
- Conforming loans
- Jumbo loans
- FHA loans
- VA loans
- USDA loans
- Fixed-rate mortgages: 30-year fixed, 15-year fixed
- Adjustable-rate mortgages: 5/1 ARM, 7/1 ARM
KBHS Home Loans offers all the usual products you expect to see from a mortgage lender, though they primarily focus on home purchase loans.
This includes conforming loans, jumbo loans, and the full suite of government-backed loans including FHA loans, VA loans, and USDA loans.
One thing that stands out with KBHS Home Loans is their adjustable-rate mortgage offerings.
They advertise ARMs more than other lenders and seem to have more options in this department.
So if you think mortgage rates will come back soon within the next 5-7 years, a hybrid ARM such as the 5/6 ARM or 7/6 ARM could be a good bridge.
Of course, they also offer fixed-rate mortgages as well, including the 30-year fixed and 15-year fixed.
And it might be possible to take advantage of a big rate buydown to keep your monthly payments down.
Many home builders have been offering big incentives lately as mortgage rates inch closer to 8%.
Those who use the builder’s lender may be entitled to special offers that likely won’t be found elsewhere.
KBHS Mortgage Rates and Lender Fees
I couldn’t find any information on their website regarding mortgage rates or lender fees. But they did have a special rate offering on the KB Home website.
It was a 7/6 ARM priced about two percentage points below the going rate for a 30-year fixed. So for those willing to go with an ARM, it presents a pretty big discount.
And it’s fixed for the first 84 months, giving the home buyer some breathing room before they need to consider a refinance, home sale, etc.
Typically, home builders offer mortgage rate buydowns, such as a 2-1 buydown, but perhaps those are becoming too expensive and there’s a shift to ARMs happening.
It’s unclear what their fixed mortgage rates are like so you’ll need to inquire about pricing when you speak to a loan officer.
As always, take the time to shop around with other non-affiliated banks, lenders, credit unions, and mortgage brokers.
It’s good to see what’s out there and gain some bargaining power in the process. You never want to look like you don’t have other options
KBHS Home Loans Reviews
KBHS Home Loans has a 4.9/5-star rating from over 3,000 Google reviews, which is impressive on both the review count and the score.
There are a lot of shining reviews from new home buyers, but also some poor reviews as well. You can filter by highest and lowest rating to see what other’s experiences were.
Their parent company, the home builder, has a 4.5/5 on NewHomeSource from nearly 9,000 customer reviews.
Over at the Better Business Bureau (BBB) website, they have an ‘A+’ rating based on complaint history, but a 1.08/5 rating based on the 84 customer reviews there.
They also have over 300 complaints over the past three years, including more than 170 over the past 12 months.
This is one of the challenges of running a home builder division and a mortgage lending division. It’s hard to make people happy in just one of those lines of business.
But if everything goes according to plan, they might be able to offer special incentives you might not find with other lenders or existing home sellers.
The biggest perk to using a home builder’s lender at the moment is the potential for a bought down rate.
Often, builders will offer big rate discounts to get you into a new home, or offer closing cost credits, or both.
This can ease affordability but some argue it’s at the expense of a higher sales price.
Regardless, do your research, gather quotes from outside banks/lenders, and take the time to negotiate.
While the process could be more streamlined with an affiliated lender/builder, don’t sacrifice price in the process. After all, the mortgage could stay with you a lot longer than the ~45 days it takes to get it.
KBHS Home Loans Pros and Cons
The Good Stuff
- Can apply for a home loan online or in-person
- Offer a digital process and hybrid remote closing
- All major loan programs available including jumbos and ARMs
- Financing specials including special rates for KB Home buyers
- Excellent customer reviews from thousands of past customers
- A+ BBB rating
- Mortgage calculator and how-to videos and guides on their website
- Free smartphone app
The Perhaps Not
- Do not list their mortgage rates or lender fees online
- Not licensed in all states
- Only for home buyers
- No second mortgages or home equity products