New Construction - Builder overbudget and might not close in time

[Duane Gunkler]

Hello BP Community,

Have a question about my personal home.  We are building a new home and did a construction to perm loan.  We signed the contract last April and were originally supposed to be in by last fall.  Here we are a year later, and we're still waiting for them to finish.  We have a fixed-price contract, but the builder is saying that they are nearly $250,000 over budget (Contract price is $781,000).  Additionally, we have gone past the 1-year mark for our construction loan.  The mortgage company gave us a 3-month extension, but we are concerned that we still won't be able to get the CO in time for that deadline.  If we don't make the deadline, they will give us another extension, but the rate lock will not be honored (we have 3.5% now).  So, that means we will jump up at least 2% on the rate.  If anyone here could give me some advice, I would be most appreciative!  The major reasons for the delay are money related.  The builder is doing several homes and we are confident he used the money from the draws to pay for other projects, so then, when the money was gone, he had to wait for other funds before resuming work again.  They are suggesting that they're going to be asking me to come up with the additional $250k at some point in the near future.  I'm happy to share more details if need be.  Thank you in advance!