Who did these drawings? Lots of things that don't look like they were designed by someone who knows about design ...

Unfortunately, the designer has left the company (she worked for the builder) and the builder has been working on it.

@PPF. here is the existing.

You could put the closet in the lower left corner by the bathroom and use the closet as an entry way. You might even line it with shelves, so it serves as storage. That said, the door into the kitchen isn't bad. If you reverse the opening swing, then a kid barging in will not see anything until they are halfway in the room, giving you time to hastily part and pull up the covers, if you were enjoying an intimate moment.

what I would do is enter the home and have a small office or seating area w concealed desk at the front......moving further back between stair wall and middle bedroom wall I would compose the kitchen. Across the entire width of new addition create your living//dining space. Over in new bedroom , eliminate the walk in closet...its not that large..the bedroom isnt that oversized as some suites so position the head of bed on left wall and use the entire right side wall ....or 2/3 of it for a normal depth closet. I've seen this layout in the million dollar condos they are constructing and you get a good long task wall for kitchen w island that runs up and down opposite, for a galley effect...w stools.... and space to walk behind and so on..... I think this will work better and a little reduction in cost with the adjustment in the bedroom. You could put a lot of large windows/ big sliders across the back instead..

use the addition for dining/ living the whole way across

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small office near front entry

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bedroom closet on wall..design the storage...eliminate the cost of bumped out closet.

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a one wall kitchen with island for a galley layout.

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A 500K project deserves to have an actual design professional involved. Not a builder with zero clue but how to make it easy for him. Start interviewing local architects. Or planning to move.

@herbflavor that's exactly it. Too much extra wasted space there in the middle.

Is it possible to go up? Build a stair over the basement stairs, do a half-story upstairs and either put the two secondary bedrooms up there, converting the two downstairs to a master suite and possible a den, or put the master suite upstairs?

HIre an architect. And get away from that builder. He doesn't know what he is doing, and won't stay in his lane.

@bpath we initially went that route (with the designer) and then after much thought, realized we don't want to have to change our lifestyle for a bigger house payment, so we went back to the drawing board.

The biggest back drawing board, with the least cost, is to live within the existing footprint. Even that's easily a 100K kitchen remodel.

I can vouch for the dark middle becoming abandoned wasted space with a big new addition - we didn't do it, but inherited such a house. Wings let in more light than a blocky addition across the whole span. I see that is what PPF is aiming at with his drawing. Wings also create more interesting outdoor space potential with their corners and nooks.

A completely new layout, but I think we'd run into the same issue with a lot of wasted/blank space through the length of the house.

I assume you meant to attach a new layout - but I don't see one.

Adding more space can make a home less livable - strange but true - if the layout is poor.

That's a really big kitchen for the size of the house. I'd start by making a list of what you really want in terms of functionality. So not "a bigger kitchen" but rather "more prep space" or "a place for 2 people to sit at the counter" or "a good landing place for food going in and out of the refrigerator".

Islands are space hogs - maybe a U shaped kitchen with a peninsula would meet your needs better.

Your walk in closet seems very small. If you can't hang clothes on both sides you may find you have more functionality with a reach in closet.