Searching for a construction loan in second position

[James Likis]

Hi everyone,

My wife and I are looking to add an ADU to our primary residence. We have a wonderful 3.25% interest rate, so we do not want to trade that in using a typical construction loan. So far we've found one bank that'll do a construction loan in second position (https://www.websterbank.com/personal-banking/borrow/mortgage...) and are wondering if anyone knows of any other banks that will do this. 

I do know a HELOC or home equity loan is an option, but those won't allow us to access to post construction ARV which we need in this case.

Thanks in advance for the help or any insights!

[Andrew Postell]

@James Likis what you are asking for is very rare.  If you already know a bank that will provide this product then let's go with them. 

[James Likis]

@Andrew Postell unfortunately this bank only allows for this on a single family primary residence and we’re in a two family. I am going to see if we can work an exception. I know we’re looking for a need in a haystack!

[Andrew Postell]

@James Likis oh goodness....ok, yes, that makes it impossible.  Well, you can certainly still try.  I mean, there are 8,000 banks in the US...I can't speak for them all.  

What I would suggest it to create an excel spreadsheet so you can track every lender that you speak with or learn about.  

First, visit your local REI groups. There are many groups that meet across the country. Some post here on the Bigger Pockets Marketplace. Many post on meetup.com. Even facebook will have some. Some of those facebook groups pages have thousands of members. Ask this question in those groups. Networking is always a great practice and you never know who you might meet there and what good information they have to share. Would certainly recommend visiting if one is close to you.

Secondly, google combinations of "community bank" with your town and state in the search as well.  Call all of those banks too.  Every small bank you can find.  The smaller the better.  If it only has 1 location - that's a good candidate.  I would say that 200 banks would be a good number to try without giving up.  You'll have to leave messages and email and keep good notes...thus the reason for the spreadsheet.

I don't know if you will find what you are looking for but that's how you would canvas the financial market to search for it.  

[James Likis]

@Andrew Postell really appreciate those organization and search tips. I've been digging into our network and plan to keep at it. Good to have the smaller the better for bank size confirmed. I have made my way up the food chain at a few regional banks, but think going even a tier smaller will help.