Using a "repair escrow" to pay for rehab?

[Dustin Lyle]

Right now I'm looking at a MONSTER of a deal that I need to move rapidly on, I need to know the general concensus on my idea... I'm sure its used in other places, I've seen it in HUD deals and I think someone used it on one of those Flip shows...


"as-is" appraisal.......... 130K
Seller WILL accept...... 100K
ARV................ 160K-175K

Now, What im thinking is rescinding the 100K offer and offering 120K, with a "repair escrow" from buyer of 20K... which will be used to, well, repair it :)

The reasoning behind this is to obtain conventional financing without paying exhorbant interest on a hard money repair loan.
I was thinking about the 203K loan too, anyone ever used one?
What stipulations are on conventional loan doc's that might stop this from happening?
Ok... not so much of a MONSTER deal, but could definitley catapult my cash reserve.