I am confused you had an inspection which revealed all these problems and you still went through with the purchase? Did your agent use alternative 1 or 2 on the contract? Jeffrey is correct in telling you to consult a real estate attorney. You might also call the local FHA office. Just from the little bit of information we can glean from your post you seem to be in the right. But, that is just one side of the story and you need professional legal advice.