Banks will fund for the plot and for the construction both, But banks do believe that Gram panchayat's have the rights to give permission upto first floor only not above that depending on area to area. As you said there is an existing G+2 construced building is there you are suggested to enquire whether it is regularised or not. If it is regularised all banks do fund for the property upto maximum of 85% of the property cost, sanctioned amount or the agreement amount which ever is less.