Each individual lender has its own criteria/guidelines for their own programs. The guidelines have to comport with Fannie and Freddie and HUD depending upon the type of loan, but the lender is allowed to be more restrictive with their guidelines.
It sounds like this particular lender is very restrictive. That doesn't mean that there isn't a lender for you. You just need to research and inquire into other lenders. If your builder is not approved with one that will approve you, then he will have to also get approved with them in order for you to get your construction loan.
Remember, not every lender does every type of loan. This is a good time to get in touch with a mortgage broker that has an extensive database of lenders, You can do this 
