Facts:
Customer owns 5 acres free and clear. In August, applies for $220,000 construction only loan to build primary residence. In October, needs $12,000 more to complete. Bank will NOT provide permanent financing. What needs to be done? Is this an additional construction loan with new app, flood, TIL, appraisal? It appears we may have relied on all previous information instead of requiring new. Is that permissible?

What you relied upon to extend the additional funds is not governed by regulation. This is a continuation of a RMT and appropriate early TIL's, GFE's, final TIL, HUD-1, etc. will be required.

why couldnt a modification agreement to the existing note be done to increase the borrowed amount?