The facts:-Two properties (one in NC, one in FL)-NC property has VA loan, FL property has FHA-NC property has 0% equity, FL property has 25K in equity (purchase price 100k, appraised 125K)-A VA IRRRL (interest rate reduction refinancing loan) allows the borrower to extract 100% of the appraised value!

Exceptions to that would be a game of multi-deck blackjack where the cards coming out of the deck influence what cards are still available (which is still irrelevant unless you've been keeping inventory and know which way the remaining deck is weighted).  

Any money you receive will likely be taxable and any reduction in debt will also be taxable. 

If there are no comps I would predict an appraisal problem which will lilely lead to a forced price reduction when it is under contract.

Shane, There are a few things I saw on the report that I think you should ask for seller assist so you can fix it yourself (Never ask seller to fix anything, they are trying to keep as much profit as possible, so they are inclined to do half-*** jobs) or ask for 2-3K reduction in price.

The existing tenants have mentioned separately (this is an up/down duplex) of smell of mold.This is not difficult to believe if in fact there are these obvious cracks on the home exterior.There is no doubt water/moisture is getting into the home and creating a condition for mold to grow.We had a structural engineer out to do our buyer’s inspection yesterday, report is due out later this evening (11/04/17).Verbal communication while on site, indicated a mutually shared concern over these cracks.The roof appears fine.A wall in the backyard will need replacing as the soil weight has almost pushed this wall over and it is only a matter of time before this thing comes falling over.Boiler may need replaced, windows as there is some clear cold.These are just concerns at this time but inspection report will lay all this out once received later today.I should have been a little smarter in not agreeing to a change in inspection objection deadline when it was presented by seller.My buyer’s agent and I should really have talked this one over, as I realize now that, it left us with only hours after inspection to come up with our inspection objection response and to be honest I will not have time to get bids for any of the extensive repair items which I do not doubt will be confirmed in the report received later today.Seeking any advice that you can give on the following: Would you proceed with purchase of the above detailed home?

I didn't factor the reduction in taxes for my cashflow analysis.

If minor issues are discovered under the home inspection/city inspection, what is better: a price reduction in the sales price or asking for a credit at closing?

There is an on going income tax reduction proposal in congress.

Larger amount is weighted as a loan and not a credit line.