HELOC In 3rd Lien Position Question

[Michael Lynch]

I purchased a home 2.5 years ago utilizing the New York First Homebuyers Club which gives you approximately 8k in grants if you meet certain criteria, which I did. I purchased the home with a conventional mortgage and used the grant to help with downpayment and closing costs. 

The program stipulates that you MUST stay in the home 5 years or you lose a pro rated portion of that 8k. My home has appreciated significantly over the past 2.5 years and I am hoping to take equity out. I applied for a HELOC and when they ran the title it came up that the 8k grant is actually a second "soft" lien against my property that will go away after 5 years which prevents this bank from allowing me to have a HELOC. This was a DIFFERENT bank from the one my mortgage is in, I'm hopeful that works, but I'm not sure.

Has anyone ever had a similar issue to this? Does anyone know of a larger bank that does offer a HELOC or something similar IF it's in 3rd position?

I'm under contract for a nice double and was hoping to use part of the money for my portion of the down payment. Does anyone have any other creative ideas?