Construction loan in second position?

[Kristen Negrotti]

Hi all,

I've owned a property in the Shenandoah area of VA since Aug 2022 that has a second buildable lot. I'd like to build on it (if anyone familiar with the area has a contractor they'd recommend I'm collecting names!), but I'm having trouble figuring out financing. The plot of land is part of the mortgage, and that company doesn't do construction loans. Any other lender I've spoken to so far doesn't want to be in second position. I have a PPP on mortage for 5 years, so until Aug 2027. I'm not sure what the steps are from here to obtain financing and would love any help.

[Rick Pozos]

You might be able to get your lender to do a partial release of the lot from the mortgage. They may want 10k or 50k or whatever to release the lot from the mortgage. They may even want an appraisal to verify that they have plenty of coverage on their loan. 

I would start with, "If I paid you 10k would you release the extra lot so that I could build on it?". They may come back with a higher number or they may say NO. It is worth a try.