USDA Direct Construction Loan, can't qualify because I own my lot

[Carson Parker]

I would love to get into investing in R.E. in the future, but this topic is about building my own house to live in. My Wife and I both have disabilities, I work P.T. at Costco for medical benefits, and get partial disability income. Income was $39k for 2016. We purchased a nice 21,000sf lot 3 years ago with a small inheritance for $26k. It may appraise for $30k today. We applied for the USDA loan to build a modest 3 bd, 1400sf house. They came back saying we don't qualify since we OWN the lot already. It needs to be financed in the deal. I was thinking, Quitclaim it to a building contractor, so it ends up as a full-package deal? Hard money or Private financing doesn't make sense to me for such a basic need, plus I need to keep costs under control.

Advice appreciated ! -Thanks.