The firm, which is called Home Community Mortgage, will cater to KB Home customers and dramatically expands upon Nationstar's role as KB Home's preferred lending partner.
"Creating Home Community Mortgage with Nationstar is the natural progression of our successful alliance," said Jeffrey Mezger, president and chief executive officer of KB Home.
"As our relationship with Nationstar has evolved, we have been very pleased with the alignment of the values of our two companies, particularly on our shared focus on achieving world-class customer service."
Nationstar Mortgage, a lender and servicer, currently has a portfolio of $425 billion loans and about 2.5 million customers. The formation of a new lending unit leverages the lender's existing relationship with KB Home and its customers.
The two firms entered into a marketing services agreement last year and dispatched Nationstar loan officers to work with borrowers on-site at KB Home communities.
KB Home, like other homebuilders, is coming back from one of the hardest hit real estate markets in the past several decades.
In April 2011, KB Home ended a joint venture with lending giant Bank of America (BAC) after reports surfaced that the two firms planned to go separate ways. At the time, it was announced MetLife would step in as the homebuilder's preferred mortgage lender under a marketing services agreement.
Then, in March of 2012, KB Home entered into an agreement with Nationstar, making the Texas-based lender the builder's preferred mortgage lender. The roll out of Home Community Mortgage expands upon that marketing services agreement, but does so by forming a new business entity to operate as an official lending company.