HELOC and Collateral on Same Property

[Daniel Parnell]

I have a specific question related to my position and was looking for someone out there that might be able to give me some clarity. Especially a lender. I am just starting out and have obtained a HELOC on my primary "residence" which is what could be considered a barndominium on 15 acres that I own free and clear. My plan is to use the HELOC for the entire purchase of an investment property around the 100k range, however, prior to becoming really interested in real estate I had promised my wife if we moved to the land and lived in the apartment of the barn we would build a house in 3 years. Well......... its been 3 years and she is not budging on the house. I'm going to have to get a construction loan for building the house and was planning on using my current property (the one with the heloc) as collateral to avoid the 20% down. The property/metal building is worth around $350k and I got the heloc for only $200k (that's what I requested). My question is: Is there a possibility of a bank using the remaining equity as collateral for the construction loan while the heloc is still active? As in, can I have a heloc and the same property as collateral? And if I did a conventional for the investment property and used the heloc just for the down payment on that loan would that be better? Or is there another option I'm not thinking of?

I still don't feel like I'm fully understanding the best ways to use my HELOC after researching and reading. I also thought I could buy another year or 2 before the wife was serious about the house!