I am an expert in real estate finance and can tell you I don't know of any seller carrybacks allowable with less than a 20% equity position (more and more becoming 25%-35%) in the property. So his deal is actually less restrictive than most I know.
Also, there are many clients in this predicament whereas the underwriting guidelines have changed since first becoming approved for a particular mortgage program... some changes occurred even after the purchase agreement is executed and earnest money given. Since most mid-sized banks offering lot loans generally do not care from where the down payment funds come, your client could raise capital from wherever. If that is not viable, it's back to the 500 phone calls to find that one bank that will do it. I have a resource that MAY finance this type of deal if your client has incredibly strong compensating factors. But, I can tell you the costs are exorbitant...7-8 points and 17% interest. IF the valuation numbers for IRR cash flow analysis still work even with this higher expense, so be it. It's a possible solution. We would have to see the entire deal upfront so feel free to visit my website (web reference) for contact info and call me. If it is a primary home or something similar, I could not help unfortunately. Be glad to share any insight I have anyhow. Good luck sir.
I don't have any exact answers for you, but have you considered subdividing the lot. Maybe the seller could sell your client the remainder of the lot at a different time or gift it or something along those lines.
I'd also suggest calling Dan Larkin over at Wintrust Mortgage. They are often able to pull rabbits out of hats that no one else can find for some reason. He can be reached at firstname.lastname@example.org or 312-952-8068 (C) or 847-277-1781 (off). Good luck.
Broker Associate, Sudler Sotheby's International Realty