First, we thought that maybe he could just provide concessions equal to the down payment and we would wrap it into the mortgage cost, but that's a no go for the underwriter.

Depends on your goals, your time table tolerance, and all other factors being equal..you have options...good position to be in.

It would be likely considered a MATERIAL CHANGE in the center in the lenders eyes unless maybe this is  a 100k sq ft plus type center where 3k only equals a few percent of total GLA.Why should the tenant pay you more money to get more profit when they do not have to per the lease?

@Jason FoyHere are the general considerations regarding 401k loans.401k Participant LoansIf your 401k plan allows for 401k participant loans, the maximum loan amount is equal to 50% of the balance up to $50k.

Add it all up and make sure buyer and lender are bringing enough to pay the seller what's contractually due (e.g. the total sources of funds are equal to the total uses of funds).   

Once we close we will be looking to add his name to the deed and have dual ownership and splitting all costs and mortgage payment equally (although the mortgage will still be solely in my name). 

You can convert them to rate bumps (if you don't want to pay out a ridiculous amount in fees/points) at a ratio of about 1 point equals 0.25% to rate (tacked onto the base owner occ rate on any given day -- rates change daily, sometimes 2-3 times a day, depending on Wall Street).

Contrary to others belief you have a plethora of options (exit as well) to closing or finalizing your strategy with this property.I'd say your network of Friends and Professionals are good to lean on for advice.

If the gross monthly rent (before expenses) equals at least 1% of the purchase price, they'll look further into the investment.

In other locations, both Realtors and Non-Realtors have quasi-equal access, but very often the subscriber fees are larger.