I have a lengthy Legal Opinion, from my seasoned Legal Team regarding this matter. 

If its cement block it should be firm if bonded to the block.  

FHA guidelines allow using collateralized loans (i.e. your 401(k), stocks, bonds, life insurance deposits, other real estate) but not anything that would increase your monthly obligation - so private loans, signature loans, etc. are all out for FHA.

If you take a loan against your 401k and consider it as your "bond" portion of allocations- I think this is the best way to frame it.  

The only way I can think to defend against this type of thing is to be involved in the material purchase or to make use of a completion bond.  

This is what I have come up with for myself.I am going to specialize in FSBO properties, buy and hold/flip investors, facebook ads, and FB group posts for buyer leadsI created a pretty lengthy "how to sell your home" guide for FSBO properties, I plan to stay in front of other agents by actually knocking on doors, and delivering the guide to them in person, and then using that to set up a follow up appointment when I can deliver a free CMA. 

My suggestion is to raise some cash for the rehab such as selling stocks, bonds, etc or maybe partnering on a deal if that is possible. 

I'm fairly young, 30, so my investment allocation was 85/15 stocks to bonds.

Steven Bond I would love to connect.

And talk about predatory, points on my sale price, not good.As to originations, there are many RMLOs out there who think they are compliant in doing seller financing, actually not from several fronts, their employer/broker must have such loans in their charter, insured and bonded lenders aren't covered with equity funded notes, and if they do any volume they may have loan concentration issues of high cost mortgages, this goes much deeper than what our newish loan originator testing goes to that they learn and it doesn't even go into underwriting!