I am assuming when the loan officer denied the loan based on D to I that an AAN was sent.
Now that he has come back in to offer additional information, I would considered this a new loan request and base the decision on the information you now have. Since he is building a home, I also assume that will be your collateral, but if you want additional collateral, there is nothing keeping you from making a conditional approval.
You can tell him you may be able to grant him a loan under the following conditions and spell them out. If he declines the conditions of approval, send him another AAN with the reason why you denied his loan request.
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The opinions expressed are mine and they are not to be taken as legal advice.