Construction Loans in Bend, Oregon with Washington Federal’s Jennifer Kihs
Karen Malanga: Hi, this is Karen Malanga with another edition of House Talk.
Today, I have Jennifer Kihs here from Washington Federal. And Jennifer, we invited you specifically because Bend is burgeoning with new construction. And as a real estate broker, I’m constantly getting phone calls. How do I get new construction financing? What does it take to build a home? Where do I go for financing? And I don’t think I found anywhere better than Washington Federal.
So, Jennifer, if you would like to just explain some of the programs you have for people that want to build a home, work with a builder and architect?
Jennifer Kihs: Perfect. Thank you for inviting me, appreciate that.
Karen: You bet. Thanks for coming.
Jennifer: Yeah. Basically, a construction loan is much like a conventional loan. Typically, we want 20% down. We will do 10% case by case. Washington Federal offers an all-in-one construction loan—so basically, it is your 12 months of build time—and the permanent mortgage all in the same loan at the same interest rate.
Karen: So, does this mean someone starts building their home, when the home is completed, then that construction loan turns into itself into, for lack of a better word, a normal mortgage?
Jennifer: Right.
Karen: Okay.
Jennifer: So, they’re going to get the construction financing upfront. And then, once that construction is complete, it’s automatically just going to roll into that permanent mortgage.
And what’s different with Washington Federal is we are the only lender that offers a 30-year fixed rate loan with that program.
Karen: Okay.
Jennifer: So, their rate is going to be locked and determined before they even start building.
Karen: So, you’re saying that, “Okay, I’m building my house. I’ve got my construction financing through you. The home is completed. Now, my 30-year mortgage begins. But it’s at the interest rate you promised me at the beginning of the build?”
Jennifer: Exactly.
Karen: Really?
Jennifer: So, a year ahead of time. It is great.
Karen: That’s terrific.
Jennifer: It is great.
Karen: Yeah.
Jennifer: And we’re able to do that because unlike many other lenders, we are a true 100% portfolio lender. So, we do not sell any of our loans on the secondary market. We will hold the paper on the loan for 30 years.
Karen: You mentioned that to me when we had lunch or some coffee meeting before, and I really appreciated that. Some of us remember the recession that we were hit so hard here in Central Oregon with a lot new construction at that time too. And I remember you telling me that Washington Federal reached out to every single client that they had and said, “How can we get through this together?”
Jennifer: That’s right.
Karen: And I found that amazing.
Jennifer: Yeah. Because we hold the paper, down in the long term, we can modify the rate, we can have them make interest-only payments if they’re having trouble staying in their home. So, we stick with our borrowers through the long term.
Karen: And not only do you offer construction financing to someone that just maybe purchases a lot and then selects their own builder. I know that with a lot of the major builders in Central Oregon, such as Pahlisch Homes, you can also help people purchase that Pahlisch Home by then providing this construction financing which then gives Pahlisch the ability to build even more homes in that neighborhood, correct?
Jennifer: Exactly. That is exactly right.
Karen: Yeah. So, Jennifer, how does someone reach out to you and to Washington Federal to find out more about your programs? What’s the best way to find you?
Jennifer: Well, to find me personally is just by the local branch here in Bend, on Bluff Drive. My phone number is (541) 330-1894.
But we do have a website which is WashingtonFederal.com and that can give you a link to any lender that we have in our eight states.
Karen: Wow!
And then also, I know getting a mortgage these days, it’s a process. Some people are pulling their hair out by the time we close on that home. Is the construction financing, all the preliminary stuff, is it pretty straightforward? You’ve got a good series of steps or you have something that you can show the potential borrower exactly what they need to provide you with?
Jennifer: Yes. And basically, it is the same things we need for a normal purchase loan.
Karen: Okay.
Jennifer: With the exception of all the construction documents, everything else is the same.
Karen: Okay. And then, Jennifer, maybe you could leave me some brochures? And if people were interested, they could come by my office and pick them up.
Jennifer: I sure can.
Karen: And can you give our listeners your phone number one more time because I know this is an important topic.
Jennifer: Yes. It’s Jennifer Kihs and it’s (541) 330-1894.
Karen: Thank you so much.
Jennifer: Thank you, Karen.
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