I don't think lender will approve the loan

I remember lenders allow seller pay portion of the closing cost, but not the down payment. Myabe some bank does. But anyway, I personally think gift money is fishy.

If you really want to make the deal work, try seller carry-back. You can give him low interest rate to make the deal work. Make sure you will be on 2nd position on the trust deed to protect your interest in the house.