Can seller cancel purchase contract?

[Britt B.]

Purchasing a home for primary residence. Went under contract on 11/26 with a closing date of 12/16. Got all the inspections done a day before inspection period ended. The contract was "As Is" but we found out that the heater would not kick on which was found during inspection period. So we sent the TRR's over. The seller did a FSBO but with a real estate agency that markets and lists only. The seller is now saying that he might not have enough cash to close next week because he somehow owes $13,000 more on the mortgage than what he bought it for in 2019?? Is he allowed to back out of the contract like this? I have well over $1,500 in the inspections, appraisals, and fees at this point. Trying to be understanding but also pretty frustrated. Any input would be greatly appreciated!! TIA