Contractor underestimated how much it'd cost to build my house

[Jessie Newton]

My husband and I bought some property in July 2017. We have a family friend who has been a contractor for over 16 years, so we chose him to build our house. He said signing a contract wasn't necessary, but did give us a cost estimate after reviewing a set of house plans. We knew we would make a good chunk of money off selling our first home, therefore we wanted to put that profit towards upgrading some things on our new house (metal roof, hardy siding, etc.) We are at the end of our construction loan (which has already been extended once due to our contractor taking FOREVER) and not only are we out of time, but we are out of money. He under quoted us about $50k, not including the upgrades we chose, since we had funds to cover that. The cost of lumber went up, he forgot about finishing out the upstairs bedroom, didn't put anything in the budget for the stair case and other misc. items. He has gone over budget with certain things and I just don't know what to do. He has barely any operating capital. He would front about $15k, and then pull off our house to go make money elsewhere since our bank wouldn't allow us to draw, being that he had not completed the current phase. Therefore, we had to move in a rental house and pay for storage for 3 months, on top of getting an extension on our loan, as well as increasing the amount we borrowed. Bottom line, who is responsible for the overages? Us, because we are the homeowners, or him, because he had a set of plans and didn't give an accurate estimate? We will never use him again. There are a couple of things that are left to complete, that we can find someone else to take care of. There are things I am not pleased with, that are either sloppy, or just plain NOT what I asked for. HELP.