City violations holding up loan

[Mike Eisenhut]

Hello,

I came across a property I'm really interested in.  It's a multifamily unit that overall is in decent shape. It's an estate sale. I originally applied for conventional loan and tried to purchase the unit.  However, the process was quickly shot down do to violations with the city.  They are not major.  Chipping paint on the outside, some window/s issues and few outlets.  City wrote the repair estimate at $1,500. The current property owners dropped the price by 10k recently. I tried offering 2k over the asking price if they will make repairs.  However, they won't budge.  I've debated applying for a 203k loan.  Does anyone have experience in these situations and came up with a way to resolve the issues? Looking for ideas. 

Thank you