Explain to them what happened, and ask about what is the process around making you whole and reimbursing you for the costs incurred by the police department's mistake.  

Just make sure you have cash for the downpayment, closing costs, and rehab start (rehab will later be reimbursed).- Tom

And, if I for example gave him upfront fees, he would reimburse the difference based on that money.

The issue with stipends is that if it is non-taxable, then the reason why you aren't paying tax on it is because you are being reimbursed for expenses that you incurred as a direct result of the job.

Note that if the bank charges a monthly fee for the escrow account, then you need to reimburse the escrow account periodically so your escrowed funds total up correctly.

What are some other creative ways to reimburse for sweat equity?

You pay the vendor, then send copy of invoice with their notes about the issue, and inform the Tenant they are responsible to reimburse you, per the terms of their Rental Agreement (assuming you do have that addressed), and to do so by a specific deadline.

I can only assume he reimbursed those rejected. 

Do hard money's business model is one of attracting the No money to transact business investors IE the person who has no downpayment and wants to get a loan.. but they have enough money on a credit card or whatever to pay the 3k upfront fee to DHM.. for their education material.then you spend money when you present a deal and of course when and if they ever fund one for you they say they reimburse you... the call room is exactly that a Utah based call center.. the rates are very high but then again no money down thats about par for the course.If you have no money for a down payment I suggest you find your self and equity partner.. then go to the myriad of very qualified HML right there in your area..

Get a brokerage to sponsor such they reimburse your tuition after 1st closing.CA license questions do not change.