We don't know the plans or size of the house, or anything about this project, so it is difficult to give a straight yes or no.
You negotiate with your builder what you can both agree upon.
For a high cost property with lots of site work, high cost add-ons and materials, this would not be out of line. The builder will be tying up alot of their resources between draw phases, and they are entitled to asking a buyer to put some 'skin in the game'.
If you don't feel comfortable with that much, then don't do the deal.
Explain you can receive a higher interest rate keeping your money where you currently have it. If the builder will not budge on this issue, you must decide how much you want that property in that community. On new construction in my area of Pennsylvania, builders are accepting 5-10%. 20% sounds excessive to me. I definitely make sure your mortgage commitment does not expire before you close on the property.
Good luck, hope it all works out,
If you have question or need help, please call. Thanks
A contract becomes a binding agreement if the contracting parties agreed to the terms and conditions stipulated therein.
You, as the consumer/buyer, can discuss the terms and conditions with the other party. It should be the meeting of the minds of both parties. If you are not comfortable with his requirement, you are not obligated to agree to his terms.
Again, it is the meeting of the minds of both parties.