Lease option, for a friend

[Kristopher Brunelle]

I am a Veteran who currently owns my own house (not much equity yet) and lives in New York. A friend of mine's father passed away after selling the house to a reverse mortgage company. My friend and her fiance do not have the credit to buy it back. I plan on buying it and giving them a lease option. My goal is to do this with as little money out of my own pocket as possible. What is the best way to get the down payment from them without having to pay taxes? I also wanted to put it in an LLC., however, my mortgage lender does only residential. should I start under my own name and then sell it to the corporation later? Thank you guys very much for the help!