Lender is Killing my Buzz

[Jim Macedon]

Built my first 4plex. Currently shopping for the permanent financing. I mentioned to the loan officer that I believe the building will be worth $700,000 and I want a loan for $500,000. He asked what I owe on the construction loan. I said $450,000. He says, well if you're trying to get cash out, then it's 70% LTV instead of 75%, and your rate might be higher. Like a lot of things in banking, this makes no sense to me. What does he care if I got a steal on the land or my cousin is a general contractor or I GC'd it myself? He wants a lien on a property for 75% of its market value, and that's what he's getting. Please explain the reasoning here. I mean, what if I built it for cash and now I was trying to put a mortgage on it? How would that work?