Complicated Real Estate Question?

I have a client who is wanting to put an offer in on a Fannie Mae foreclosure, and they are paying in cash. They are needing to spend all of $300,000 that is coming from an insurance claim, and it has to all be spent on the house. The problem is, the house needs a little work, and is listed at $290,000. Fannie Mae will not improve the property to increase the value of the home to the $300,000 mark. The buyers must spend the entire $300,000 as stated in their claim or the excess monies must be returned. How could we set this up so that it may be possible to negotiate the price downward, but claim that the entire $300,000 was used to purchase the property, with the excess money being used to fix the place up?