I'm sorry to hear about your situation
Do you have any other options or are you down to the wire? If there are no other options and since you like the neighbors maybe you could ask him for a trade off..... He could buy the supplies to fix it up and you could provide the free labor. That way his house gets fixed up for the next renter when you move on , but you get to fix it nice for yourself in the meantime. You said you didn't think he would put out money for it , but it wouldn't hurt to ask. You would both benefit from it , and if he thinks of it from a business standpoint he may see that.
If you have other options and don't want the house then my advice is just thank him for the offer and tell him it would take more than you have right now to get the house in order, and you don't want to put all that money and effort into a house you don't own.
Hope you work it all out.
