Getting Finance for building 4 units

[Kelvin Huang]

Hi all,

I'm planning to re-build my house to a 4 units and I'm looking for the best way to get finance for this project. My total project cost is about $500K. I do have a lot of equity on this property so I was thinking getting $450K HELOC. I shopped at different banks and BofA gave me the best rate, 3.5%, because I have a very good relationship with BofA. However, when the appraiser, whom BofA hired, came to my house, he submitted the report to my Lending Officer at BofA that I needed to re-paint and fix some of the damages on the exterior of my house before I could qualify for the loan. But I plan to tear down part of my house, so re-painting and fixing the damages would cost almost $10k, which would be extra cost and it did not make sense to me. Therefore I did not qualify for the HELOC.

I don't think I should do a re-fi and take out the money because there will be phases of this construction project, so I wanted to take out the money when the construction payment is due.  Is there anyone who had this problem and knew how to deal with this?  If not, is there any way I can borrow the money and finance this project with lowest interest rate possible?  Thanks.