Need advice! Financing with rehab expenses!

[Jessica Hood]

Hey everyone! I really need some urgent advice here! My hubby and I are buying our first home. We have it picked out and are in counter offer stages. Purchase price will be approximately $70k. The home is in need of a new roof. Hubby's father-in-law owns a large, well known, roofing company and hubby is a roofing technician for them. Hubby's brother and brother-in-law also works at the roofing company. So needless to say, we are armed with experts and a licensed contractor to do the repairs.

We are able to do the repairs without having to pay for labor. However, I am being told by the lender that the only loan I can get for this property is the 203k rehab loan. Also that they require the funds to cover the total cost of materials AND labor that would be typical from all other roofing companies. The lender will not let us borrow only for materials. We do not want to borrow for labor costs when we won't have any. If we borrow only for materials, we can do the job for about $2k. If we have to use the going rate from roofing companies including labor... it's more like $7,500.

Is there some way around this? Some alternative way to finance this so we can do the repairs ourselves? Are there any loans we can obtain that would give us the mortgage without requiring the rehab expenses be financed so we could just pay them out of pocket?

Also, is $5k in closing costs typical for a 203k loan??

Thanks everyone!