Low Appraisal Stops Financing - what to do?

[Stewart Wyne]

So I've got a residential construction project that was supposed to kick off this year. I own the land free and clear (200k value), constructions costs are $815k.  I planned to use the land as the 20% down payment. I had my bank financing lined up and approved, but the appraisal came in low at $850k. Which I disagree with. But now the bank is saying they will only loan 80% of that appraised value, which leaves me short $130k. 

I looked into getting a hard money loan in a second position for the down payment, but they wanted 5 points and 14% interest which is just too expensive. This isn't a flip so there's risk I could get stuck with that high interest. 

Any suggestions? Should I just apply at another bank and hope for a better appraised value? Any other creative financing ideas I could use? I've got the CF to support the debt, just not the capital. There seems to be very little appetite for private loans in second position.