Getting partial release from HUD for infill lot purchase

[Alex Rollins]

I recently had a infill lot under contract to purchase so I can build a 2 family house. After months of seller trying to get a clear title, seller was not able to get the partial release from HUD unless all the proceeds went to the mortgage balance. Because of this seller decided to back out. Is there still a way to make this deal work?

One possible idea I had was working a new deal with seller for 50% less than the original deal on the recorded paper and separately give seller cash once I build and sell new home. 

I welcome all ideas and feedback. Thanks. 

[Alex Rollins]

Quote from @Kevin Sobilo:

@Alex Rollins, if you had a written contract with the seller has the seller offered you money to terminate the contract? If not I would suggest they make an offer so they can get out of the contract.

The seller can sell you the property, so you can always try to sue for specific performance to sell the property whether they want to or not if you have a good written contract. 

Thank you for your insight. I will use this as leverage to negotiate. However I am ultimately looking for a win/ win/ win for all parties. Seller gets some money in her pocket, FHA gets some money so they can partial release on lot and I get to build.