You'd only need to qualify for the $400k loan, but since construction loans are unique to each lender, only the mortgage lender you are getting your construction loan from can say without any doubt if your $200k in the land would go towards their down payment requirement or not. Even if it does, some construction programs require you put some of your own cash into the deal so you are more apt to finish rather than walk away if things get tough. For example they might have a 20% down payment requirement, but 5% of that must be from cash.
Excellent info, Shane! Thanks very much.
One last question... I assume then my monthly payment would be calculated from the $400,000 figure. Correct?