Closing Cost Credit for Repairs Greater than Closing Costs

[Alex Roth]

Hi All, I am in contract to purchase a 2-family property. I am financing the purchase with a 3.5% down FHA mortgage. Through my due diligence I discovered repairs needed and have agreed upon a credit from Seller in the amount of $25,000. My expected closing costs are about $15,000. That leaves me with $10,000 that I need to receive as a credit. I am unwilling to accept a purchase price reduction in the amount of $10,000 because of how highly leveraged I am. A $10,000 price reduction will only save me $350, meaning I will still have to come out of pocket about $10,000 greater than underwritten, when it comes time to do the repairs. I do not want to purchase the property if I have to exceed my underwriting in this fashion. So the question is, how can I creatively structure the $10,000 Seller credit so that it directly offsets my costs to perform the repair work after closing? I have explored the concept with my lender of the $10,000 being disbursed to an escrow account at closing for post-closing repairs but they have indicated that this will lead to the Lender needing to do further diligence on the repairs, perform inspections, etc. all of which will kill the deal for me, because I need to close in the next week. Can I have a side agreement with the Seller that after closing they will distribute an extra $10,000 back to me? How else can this be achieved?