I think it's their way of saying that they won't be working with a bank or doing inspections, it has to be a simple transaction. 

He would front about $15k, and then pull off our house to go make money elsewhere since our bank wouldn't allow us to draw, being that he had not completed the current phase.

I'm new and I just signed a deal on a bank owned townhouse.

Sine we own our primary residence one of the banks we contacted suggested we use a home equity installment loan (HEIL) saying that it would allow us to make what amounts to a cash offer on the property and secure the loan with a similar term and interest rate to a conventional loan and the added benefits of no closing costs.  

Some offer more if your married depending on the bank you finance with. 

I use other small banks.

I didn’t want to have to put the full 20% down so I went to 2 local banks that I had worked with before and said I wanted to do 10% down and they could put one of my free and clear houses on the loan as collateral.

This will preserve the value for mortgage purposes because the bank will grant loans based on the value of the contract, even if the contract is way below appraisal.

But the bank told me that if we had a separate contract to pay for a portion of the roof repair that would be fine.

If you answer zero, then put your money in the bank and get .1 or 1%.