Selling a home after receiving insurance claim money

My elderly mother's home was damaged due to a pipe bursting inside her home. She got the pipe fixed, paid for out of pocket. The insurance company gave her the funds to repair the damage that was caused by the pipe bursting. The people that were giving her the estimates during the process came back and offered to purchase her home and told her that they did not want her to have the repairs made because they would go in a different direction rather than having the same layout rebuilt. The demo has been completed in the kitchen and in the bathroom, where the damage occurred when the pipe burst.

The investor said she could just keep the money the insurance company gave her and would purchase her home as is. She could use that money to move into a smaller, more manageable home. Is this legal or does she need to have the repairs completed regardless of what the investor wants done?