The buyer is typically responsible for all inspections they order.
Don't feel bad, your inspection fees discovered a problem that the seller has to either:
a) live with
b) repair before he can sell to someone else
Therein lies the protection you receive from having your property inspected. Now, if you still want that home and have the funds you might want to look into a 203k rehab loan.
email me for more details if your interested.
Best thing to do, at this point, is to try to salvage the deal. I don't know enough about USDA loans, but can the purchase price be bumped up a tiny bit so that the extra will cover some of the cost of the roof repair? That way, he'd be out of pocket for less.
Maybe your agent has some suggestions. I'm sure he/she would like the deal to close.
Failing that, maybe spend a few more dollars with the lawyer for a firmly written letter to the seller reminding him of his obligations.
I hope that your transaction works out favorably for everyone involved.
Even though the seller agreed to pay closing costs, that only applies if the deal closes. This is part of the risk you take when buying a home and your agent should have explained this to you. I wish you the best and hope you find a wonderful home.